Instead, refinancing replaces your existing car loan with a new one, where you can choose the terms that best fit your needs and budget. For example, if you have 24 months left on your current loan, you can choose a new two-year loan so you don't extend the term until the car is paid off. Refinancing exchanges your current loan for a new one. You could get a lower interest rate and a shorter or longer term than you currently have.
However, opting for a longer repayment period for a new loan could make you feel like you're starting from scratch. Since refinancing involves applying for a new loan with new conditions, you're basically starting from the beginning. However, you don't have to choose a term based on the term of your original loan or the remaining repayment period. When you refinance your car, you're starting over with your loan.
You are getting a loan for a new car that will pay off your current loan. This new loan will have a different APR for an auto loan, a different repayment plan, and may or may not be granted by a different lender. For example, if you're refinancing your mortgage, you might find that the top mortgage refinancing lenders offer several repayment terms, including 10, 15, and 30-year terms.
