When your new refinanced loan is approved, your new lender will cancel your old loan and you will begin making loan payments to your new lender. If the lender is the same, they will withdraw your old loan and issue a new one that, instead, you will begin to repay. Usually, the first payment on your new loan is due 30 days after you've formally accepted the loan. Make sure you know when this payment is due and that you do so on time to avoid commissions or charges. Refinancing doesn't restore the repayment term of your loan, but it does replace your current loan with a new one.
You may be able to choose between different offers for your new loan depending on your objectives, including a longer or shorter repayment period. In general, the best available loan will be the one with interest rates and repayment terms that fit your budget. Compare the different lenders and options available before applying. If you don't do your research, you could overpay for your loan. Remember that, just like refinancing a home, your refinanced auto loan restarts the term of your loan.
You may be able to choose an option with a shorter term and a higher monthly payment, but with a lower interest rate, which could save you money on interest charges over the life of the loan. Refinancing your car is a lot like refinancing your home: you are going to apply for a loan for a new car to replace the one you have. Refinancing is an opportunity to start over with your loan, so take the time to apply with several auto loan refinance lenders. For example, if you're refinancing your mortgage, you might find that the top mortgage refinancing lenders offer several repayment terms, including terms of 10, 15, and 30 years old.
