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Step 1
Before refinancing your car loan you want to look at your current loan status. Check the amount owed, the current interest rate and if there is a prepayment penalty or not. If there is a prepayment penalty over $500 and you owe less than $10,000 on your loan it is probably not worth the hassle and may actually cause you money unless you are dropping more than 13% on your car loan.
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Step 2
If your current auto loan does not have a prepayment penalty you can begin to look. Go to local banks, credit unions and even look for online financing as they offer lower rates most of the time. Inquire with at least three different banks and make sure they offer a lower interest rate than your current bank and a very low fee for processing (less than $100). There are plenty of banks who will do this for $20 or less on car loans.
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Step 3
After you have selected your loan company fill out the needed paper work. They will contact your current lender for the loan payoff amount, pay off your old loan and bill you at the new interest rate. Make sure if you have auto bill pay setup that you change the payment to go to your new lender for the new amount.
Now your finished, enjoy the savings!
