Refinancing your car loan can be a smart financial move, but it’s important to ask the right questions before moving ahead. By doing your research and asking the right questions, you can ensure refinancing aligns with your financial goals and offers helpful benefits. Here are the top questions to consider before refinancing your car loan.

Why are you refinancing?

Before starting the refinancing process, clearly define your goals. Are you looking to lower your monthly payments, reduce your interest rate, or shorten your loan term? Understanding your primary motivation will help you focus on the options that best suit your needs.
 

What is your current loan balance and interest rate?

Knowing your current loan term is essential. Check your loan balance, remaining term, and interest rate. This information serves as a baseline for considering potential refinancing offers.
 

What is your credit score?

Your credit score plays a crucial role in determining the interest rate and terms you would qualify for when refinancing your car loan. Check your credit report and score before applying for a refinance. If your credit has improved since you took out your original loan, you may qualify for a lower interest rate, which means you’d end up paying less over the life of the loan.
 

Will your monthly payments change?

One of the main reasons people refinance a loan is to lower monthly payments. While this can provide short-term relief, it’s important to consider the long-term impact. Extending the loan term to lower payments might result in paying more interest overall.
 

What is the lender’s reputation?

A credit union is a good place to refinance your auto loan because of their competitive rates, personalized service and member-focused approach. When you refinance your auto loan with Partner Colorado, you’ll make no payments for 90 days, plus you may be able to lower your car payment, your interest rate—or both.*
 

Will refinancing affect your credit score?

Applying for a refinance loan triggers a hard inquiry on your credit report, which can temporarily lower your score. Additionally, closing your old loan and opening a new one may impact your credit age and utilization ratio. Consider these factors before refinancing.
 

Is refinancing the best option?

Finally, evaluate whether refinancing is the right choice. In some cases, adjusting your budget or exploring other financial products might be more beneficial. Weigh all your options carefully before making a decision.

By asking these questions, you’ll be well-prepared to navigate the refinancing process and make an informed choice. Refinancing your car loan can be a valuable tool for saving money or improving your financial situation, but it’s important to approach it with clarity and confidence.


*Ninety-day payment deferral is available to qualified borrowers for auto loans approved through standard lending guidelines (without exceptions). Regular finance charges continue to accrue during the deferred payment period. Not applicable on motorcycle, RV, boat or commercial vehicle loans, or current Partner Colorado auto loans. This offer is not applicable on vehicles older than 15 years or with more than 160,000 miles. All loans are subject to member credit qualifications and normal credit and income verification. Offer and rates subject to change without notice. Other terms and conditions may apply.