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How does auto loan refinancing work?

Eager and ready to lower your auto loan payments and asking yourself how does auto loan refinancing work?

Nicholas Hinrichsen - Published: September 9, 2020

Refinancing your auto loan is a simple process. Just follow the following four steps:

  1. You look for a new auto loan company that offers lower rates than your current one.
  2. You apply for a new loan and get approved.
  3. You give the new lender authority to pay off your existing loan
  4. You start paying the new auto loan company

It's really pretty simple ... in theory! The problem is that auto loan companies don't like refinancing too much. Therefore, they don't actively approach you to lower your rates.

Instead, you have to do all the legwork to find a better auto loan company, visit their branches and waste a lot of your time.

We recommend you take a look at our auto loan refinance calculator to calculate how much you could save and go from there - we're happy to help!


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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