This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. The application process may take only a few minutes. It’s easy to apply for an auto loan online, at a branch or by calling us at 1-88. If you’re considering refinancing your car loan, Navy Federal is a good option with low rates and low monthly payments. Always ask what fees are involved and double-check your refinancing contract before signing it. Lenders might also try to tack on additional fees. You'd end up paying much more in the long run. For example, a lender might offer a loan with a much lower monthly payment, but with a 7- or 9-year term to pay off the loan. Your lender might try to get you into a more costly loan. You might shrug at a monthly savings of just $14, but you'd end up saving about $840 over the 5-year life of your loan.īut be cautious. Your monthly payment has dropped from $373 to $359. For example, let's say the interest rate on your original 5-year loan is 4.5 percent and you’re able to reduce it to 3 percent through refinancing. If you can reduce your interest rate even by a small margin, you could save a substantial amount in the long run. The biggest benefit of refinancing a car loan is saving money. If this is the case, spend a couple months improving your credit score before you try again. While solid financials might get you into a lower-rate loan, if your income and credit score are too low, you might not qualify to refinance. Information about your current loan (such as the monthly payment and remaining balance) will also be required, along with information about the car (such as the VIN, mileage, make and model). Prepare to grant permission for the lender to check your credit. Start by gathering your pay stubs or other proof of income. You’ll need to provide anything that will show the financial institution you’re a low-risk borrower. Think of refinancing as simply applying for a new loan.
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