How to Refinance Your Car Loan

1. Collect Documents

Find a recent payment stub from your current auto loan and make sure you know the following:

Your current monthly payment and the remaining balance.
The amount of time left to repay the loan in months, often called the loan term.
The interest rate you’re paying.

The customer service number of the lender in case you have questions.

Dig out your original loan contract and verify that there are no prepayment penalties. If you can’t find your contract, don’t worry. Your lender’s customer service department can give you the information you need, or even email you a copy of the contract.

You’ll also need the following items to complete loan applications:

Your driver’s license.
The vehicle identification number of your car.
Pay stubs from your current employer or proof of employment.
Your Social Security number.

2. Evaluate Your Credit

If you’ve made all your car loan payments on time for a year or more, your credit has probably improved and there’s a good chance you can benefit from a refinance.

Of course, that’s only true if you’ve also kept all your other financial commitments up to date. The proof is in the numbers, so you’ll have to find out where you stand, and you have two options for doing so.

You can pull your own credit report — that’s a history of your credit activity — or check your credit score for free to see if you’ve had any problems, such as late payments. Because you are checking your own credit, this kind of research will not lower your score.

3. Run the Numbers

Using our auto loan refinance calculator, first enter information about your current loan. Input the original loan amount, your interest rate and the length of the loan in months. Then enter the balance that is remaining to be paid and how many months are left until you pay off the loan.

Next, enter the number of months you want for the new loan and the interest rate you anticipate getting. You will then see the new — and hopefully lower — monthly payment, how much you will save each month and your total savings over the life of the loan.

This is also a good time to see how much your car is worth by looking up online guides or, better yet, getting cash offers from your local CarMax or online services such as Vroom and Carvana as a baseline.

4. Evaluate Loan Terms

If you decide to refinance, you can leave the length of your loan unchanged or consider these options:

Pay off the loan more quickly. If you’re used to making loan payments of a certain amount, you may be able to keep the payment about the same but shorten the length of the loan. This saves you money because you’ll pay less interest over the life of the loan.

Lower payments with a longer loan. If your budget is stretched and you want a little financial breathing room, you could extend the loan term by a few months or even a year to lower your payments. This isn’t ideal because you’ll pay more interest in the long run. However, it’s better than missing payments and damaging your credit history.

5. Here’s Where We Come In

Fill out a lending application with Easy Auto Refinance.

If you’re approved, here’s a quick overview of what you can expect: Refinancing starts your auto loan over, so you’ll sign new loan documents and a new loan will be created for you, at a new interest rate, with the term length you choose. We will pay off your old loan, and you’ll begin making payments to Easy Auto Refinance at the lower rate.