Question 1

When should I refinance my car loan?

Accepted Answer

Consider refinancing if you can get a significantly lower interest rate (1-2% or more), your credit score has improved, or you need lower monthly payments. Generally, refinancing makes sense if you can save at least $1,000 over the life of the loan and break even within 24 months.

Question 2

What costs are involved in refinancing a car loan?

Accepted Answer

Refinancing costs typically include application fees ($25-100), title transfer fees ($15-50), lien recording fees ($10-25), and sometimes prepayment penalties on your current loan. Total costs usually range from $100-500, though some lenders offer no-fee refinancing.

Question 3

How much can I save by refinancing my auto loan?

Accepted Answer

Savings depend on your current rate, new rate, remaining balance, and loan term. A 2% rate reduction on a $20,000 balance over 48 months could save $800-1,200. Use our calculator to see your specific savings potential based on current market rates.

Question 4

Will refinancing hurt my credit score?

Accepted Answer

Refinancing may cause a temporary small dip (5-10 points) due to the hard credit inquiry, but this typically recovers within a few months. The long-term impact is often positive if refinancing helps you make payments more easily or pay off the loan faster.

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