Auto Loan Refinance FAQs

• When should you refinance a car loan?

  An Auto refinance loan replaces your existing loan with new financing that offers a lower rate or lower monthly payments, usually with a longer payment term. Refinancing can make the most sense when your credit score has improved, interest rates have dropped, or your income has increased, and you want better terms. It’s also worth refinancing if your current loan has high monthly payments, you’re unhappy with your lender, or you want to remove a co-borrower.

• What is the downfall of refinancing a car?

  Refinancing your car can extend your loan term, which means you pay more interest over time, even though you might pay less each month. Refinancing for longer might also mean you end up with an “upside-down” loan, which means you end up owing more on your loan amount than your car is actually worth. This can make it difficult to sell your car, as you are unlikely to get enough for your vehicle to settle your auto loan.

• Can I refinance the full amount I still owe on my vehicle?

  Yes, Listerhill allows you to refinance up to 100% of your vehicle’s value, with no additional down payment required.

• When is an auto refinance not an option?

  Refinancing may not be worth it if you’re near the end of your loan, since the savings will be minimal. It also may not help if your credit hasn’t improved or if current rates aren’t much better. Watch out for longer terms that increase your total cost over time.

• Will refinancing my auto loan hurt my credit history?

  Refinancing may cause a small dip in your credit score due to the inquiry on your credit report, but it’s usually temporary.