At iLending, we talk to thousands of people each year who are considering refinancing their automobile loan. Some are looking to lower their monthly payment, others want a better interest rate, and some are just searching for breathing room in their budget. Whatever the reason, refinancing can be a smart financial move. But like any decision, it comes with both advantages and drawbacks.
In this guide, we’ll walk through the pros and cons of refinancing an automobile loan, and explain how the process works. The key is to understand both sides of the equation so you can make a confident choice.
Refinancing a car loan means replacing your current auto loan with a new one, ideally with better terms. That could mean a lower interest rate, a smaller monthly payment, or a loan term that fits your situation better.
Think of it as hitting the reset button on your auto loan. You keep the same car, but the financing behind it changes. A refinance company for cars, like iLending, helps you find the best lender and terms for your needs.
Let’s start with the positives, because for many people, the advantages of refinancing are significant.
One of the top reasons people refinance is to reduce their monthly payments. By securing a lower interest rate or extending the loan term, you can ease your monthly budget and free up cash for other needs.
At iLending, our clients save an average of $148 per month*. That’s money that can go toward bills, savings, or even just giving your family a little more breathing room.
If your credit has improved since you took out your original loan, or if interest rates have dropped, you may qualify for a significantly lower interest rate. Over time, that can save you hundreds or even thousands of dollars.
Working with a refinance company for cars like iLending gives you access to lenders and rates you may not find on your own. Because we partner with a large network of lenders nationwide, we can match you with terms that fit your unique financial picture.
Refinancing isn’t one-size-fits-all. You may choose to:
Both options have their place, depending on your goals. At iLending, we help you weigh the pros and cons of each so you can choose what makes sense for your life right now.
In many cases, refinancing is a chance to add important protections like a GAP Waiver or a vehicle service contract. These coverages can save you from unexpected expenses down the road.
We see refinancing as more than a transaction, it’s a chance to set you up for long-term peace of mind.
If you originally needed a co-signer to get your loan, refinancing gives you a chance to remove them (assuming your credit and income now qualify on their own). This can simplify your finances and relieve your co-signer of responsibility.
A refinance itself may cause a small dip in your credit score due to a hard inquiry, but if it helps you stay current on payments, it can actually improve your credit long term. Lower, more manageable payments reduce the risk of missed or late payments, both of which weigh heavily on credit scores.
Of course, refinancing isn’t the right choice for everyone. Let’s talk about some potential downsides.
Some lenders may charge application fees, title transfer fees, or prepayment penalties (if your current loan contract includes them). These costs can eat into the savings you’d get from refinancing.
At iLending, our Loan Consultants walk you through any potential fees upfront so there are no surprises. In many cases, the savings far outweigh the costs.
Lowering your monthly payment by extending your loan term can feel like a relief, but it also means you’ll be paying interest for a longer period of time. That can increase the total cost of your loan, even if your payment is smaller each month.
This is why having an expert refinance company for cars guide you through the math is so important. We’ll show you exactly how much you’ll save over the life of the loan so you can make an informed choice.
As mentioned earlier, refinancing typically requires a hard credit inquiry, which may lower your score slightly in the short term. However, this impact is usually small and temporary.
The bigger risk comes if you miss a payment during the transition. That’s why we carefully manage the timing of your refinance to ensure your old loan is closed and your new one is open without overlap.
If your credit score hasn’t improved since you first financed your car, or if your vehicle is older with high mileage, you may not qualify for significantly better rates. In some cases, refinancing won’t offer much benefit.
At iLending, we’re upfront about this. If refinancing won’t save you money or put you in a better position, we’ll tell you. Our goal isn’t to close a deal, it’s to improve your financial life.
Refinancing isn’t right for everyone, but there are some common situations where it makes the most sense:
If one or more of these apply to you, refinancing could be a smart move.
Not all refinance companies for cars are the same. At iLending, we’ve built our reputation as the nation’s most trusted car refinance company by focusing on people, not transactions.
Here’s what sets us apart:
Refinancing an automobile loan has both pros and cons, but for many people the benefits far outweigh the drawbacks. The key is working with a trusted refinance company for cars that will guide you through the process, explain the numbers clearly, and make sure refinancing truly helps your financial situation.
At iLending, we believe everyone deserves access to better loan terms and a more secure financial future. Whether you’re looking to save money each month, lower your interest rate, or simply get more peace of mind, we’re here to help you make it happen.
It’s as easy as A-B-C:
A – Apply online in a minute or two (no credit impact).
B – Browse personalized loan options from our lender network.
C – Connect with your dedicated Loan Consultant and finalize your refinance.
You could be just days away from a lower monthly payment and a more manageable financial future.
Start your refinancing journey today with iLending – the refinance company for cars that puts people first.