Choosing to refinance a car loan is a common strategy with the goal of saving money on your monthly payment or reducing your interest rate. For drivers in Virginia Beach, VA, knowing how and when to refinance your car loan is key to making a smart decision. Here at Hall Nissan Virginia Beach, our team of finance experts is happy to review the pros, cons, and process of refinancing a car loan.
How Refinancing Works
The process of refinancing is essentially replacing your current auto loan with a new one from a different lender. Here are the steps involved:
- Check your current credit score.
- Gather documents such as proof of income, current loan information, and vehicle details.
- Apply with a few different lenders to compare rates and offers.
- Choose the best loan for your situation.
The Pros of Refinancing
When done at the right time, refinancing your loan offers a number of advantages.
- Lowers your interest rate: If your credit score has improved or market rates have improved since you first signed your loan, you might qualify for a lower interest rate.
- Reduces your monthly payment: Additionally, an improved credit score or market rates can result in a smaller monthly payment.
- Shortens your loan term: On the other side of the coin, if you can afford a slightly higher payment, you can refinance to a longer term to pay off your loan sooner.
Important Considerations
It’s essential to keep in mind that while a longer loan term lowers your monthly payment, you will pay more in total interest over the life of the loan. Also, applying for a new loan can sometimes involve paying fees.
Get Nissan Finance Advice From Our Virginia Beach, VA Experts
Here at Hall Nissan Virginia Beach, our team of finance professionals is here to answer your questions about refinancing. Visit us today to speak to car finance experts. We’ll put you on the right track!