For most people, owning and driving a vehicle is not merely a luxury but a necessity. In today's fast-paced world, life can be quite hectic if you don't have your own mode of transport. Although 95 percent of American households own a car, not all prospective car buyers walk into a car dealership and write a check or pay out of pocket. A huge number of people need a little financial assistance to make the purchase. According to a CNN Business report, 107 million Americans have car loan debt, which is about 43 percent of the entire adult population in the United States. If you borrowed money to purchase a car, whether it's a brand-new Lexus or a used Subaru, it's smart to verify that you're not paying more than you need to. You can end up saving money by refinancing your car loan, and it pays to know how that process works. Read on to find out when and how to refinance a car loan.
In simple terms, car loan refinancing means replacing an existing car loan with a new one. The refinanced car loan is basically a fresh contract, usually with another lender, that gives the borrower the opportunity to agree to different terms.
The important question here is - how soon can you refinance your car loan? Is it after six months? One year? Or is it five? Well, there's no straightforward answer to that question because the situation is unique for each borrower.
If you're asking yourself, "When should I refinance my car loan?" consider these four factors to help you decide if you should refinance now or wait a little bit longer: