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How car loan refinancing works?

How does car loan refinancing work and can it save you money?

Nicholas Hinrichsen - Published: September 24, 2020

Did you know you can save a ton of money by refinancing your car loan? Here's how refinancing works and saves you money. When you originally applies for car loan:

  • The dealership only looked at your credit at that moment in time
  • The dealership makes profit on the loan, so often selects a loan that is best for them and not for you
  • Interest rates themselves for auto loans may have changed
  • Is for a set period of time starting at when you bought the car

Auto loan refinancing reduces your payments by "re-examining" your car and your credit at this new moment in time. So if your credit has improved, you're entitled to lower interest. If the dealer selected a bad loan, you're entitled to a better one. If interest rates have gone down, auto loans are cheaper for everyone. And finally, you're re-setting the time clock of the loan to start again at today's date, so worst come worse you're spreading out the payments over an even longer time horizon for lower monthly payments.

Haven't explored refinancing yet?
WithClutch.com is a fully digital platform that lets car owners like you do so from the comfort of their own home. No need to set a foot in a bank or credit union. You can lower your rate or get cash in as little as 20 seconds.

Follow three simple steps to refinance your auto loan, get approved in seconds and save thousands in minutes.

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