Refinancing your car loan could allow you to save money on interest, lower your monthly payments, or potentially both.
Want to see how refinancing could affect your bottom line? Use our refinance calculator to compare your current loan with a new, refinanced loan and easily compare rates and calculate your savings.
A car loan’s interest rate is what the lender charges you in exchange for giving you a loan, usually expressed as an annual rate. A car loan’s annual percentage rate (APR) is the interest rate plus any additional fees (including processing fees, document fees, late fees, loan origination fees, title charges, and/or lien fees).
Because APR includes potential additional fees, it provides a more apples to apples comparison between car loans.
When you refinance an auto loan, you take out a new loan with a new rate and term to pay off the old loan. Refinancing has multiple options, each with potential distinct benefits:
The best time to refinance your auto loan is when you wish to save money by reducing interest rate or increase your cash flow by lengthening loan term and lowering monthly payments. LendingClub requires you to have made at least one payment on your current loan, and that your current loan term is longer than 24 months.
Your auto refinance rate will depend on your credit profile and the terms of the loan. You can check your auto refinance rate through LendingClub in just one minute without affecting your credit score.
If you’re just starting the car-buying process and debating leasing vs. buying, check out our blog post on the important factors to consider.
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