Refinancing a car with the same lender can be an attractive option for many car owners. It can be a faster and easier process, as the lender already has all of your information on file.
However, there are still some mistakes that you should avoid to ensure that you get the best deal possible. In this article, you will explore the top mistakes to avoid when refinancing a car with the same lender.
1. Not Shopping Around
One of the biggest mistakes that car owners make when refinancing their car with the same lender is not shopping around. While staying with the same lender may seem convenient, you may be missing out on better rates and terms from other lenders.
So before committing to refinancing with your current lender, be sure to shop around and compare offers from other lenders to ensure that you are getting the best deal possible.
2. Not Checking Your Credit Score
Your credit score plays a significant role in determining your refinanced car loan’s interest rate and terms. Before refinancing, checking your credit score and ensuring it is in good standing is essential.
If your credit score has improved since you originally took out your car loan, you may be able to qualify for a lower interest rate, which could save you a significant amount of money over the life of your loan.
3. Accepting the First Offer
Another common mistake that car owners make when refinancing their car with the same lender is accepting the first offer they receive. While your current lender may offer you a refinancing option, there may be better offers than this one.
Shopping around and comparing offers from other lenders is essential to ensure you get the best deal possible. Don’t be afraid to negotiate with your current lender or other lenders to get the best possible terms for your refinanced car loan.
Lantern by SoFi says, “It’s also great to check your current rate of interest to determine whether you’re getting a much better offer on refinancing or not.”
4. Extending Your Loan Term
Extending your loan term when refinancing your car with the same lender is a good idea, as it can lower your monthly payment.
However, this can cost you more money in the long run. When you extend your loan term, you are essentially taking on more debt, which means that you will be paying more interest over the life of your loan. So instead of extending your loan term, negotiate a lower interest rate or a more favorable repayment plan to help reduce your monthly payment.
5. Forgetting about Fees
When refinancing your car with the same lender, it is important to know any fees associated with the process.
Some lenders may charge fees for processing your refinancing application, and these fees can add up quickly. Be sure to ask your lender about any fees associated with refinancing and factor these into your decision-making process when considering refinancing with your current lender.
Refinancing a car with the surrent lender can be a convenient and attractive option for many car owners. However, there are still some mistakes that you should avoid to ensure that you get the best deal possible.
By shopping around, checking your credit score, negotiating with lenders, avoiding extending your loan term, and being aware of fees, you can make informed decisions when refinancing your car loan. By taking these steps, you can save money and get the best terms for your refinanced car loan.