Your credit score has improved since you bought your vehicle. Interest rates dropped. Your monthly budget feels tighter than expected. These common scenarios make auto loan refinancing worth exploring, potentially saving you thousands over your loan term. The Acura financing team at Gold Coast Acura helps drivers understand when refinancing makes sense and what the process requires.
What Refinancing Requires
Refinancing involves taking out a new auto loan with better terms to replace your existing loan. Most lenders require at least six months of on-time payments on your current loan to demonstrate responsible payment history before it’s possible to refinance.
Your vehicle must also meet certain age requirements—many lenders won’t refinance vehicles more than 10 years old with over 125,000 miles. You’ll need proof of income, current insurance, driver’s license, vehicle registration with VIN, and your existing payoff amount.
How Refinancing Affects Your Credit Score
Applying for refinancing temporarily impacts your credit score through hard inquiries from lenders checking your credit report. This typically causes a drop of just a few points that recovers within a year as you make consistent on-time payments.
Credit scores around 670 or higher typically qualify for the best interest rates when refinancing, though many lenders approve borrowers with scores in the 500s at higher rates. Your debt-to-income ratio also matters, with most lenders preferring ratios below 45 percent.
When Refinancing Makes Financial Sense
Consider refinancing when your credit score has improved significantly since your original loan, when market interest rates have dropped, or when dealership markup on your original loan seems excessive. Refinancing can lower your monthly payment by extending your loan term, though you’ll pay more interest overall, or help you pay off your vehicle faster with a shorter term at lower rates.
Explore Acura Financing Options in Ventura, CA
The finance team at Gold Coast Acura provides personalized guidance on Acura financing and refinancing options tailored to your credit profile and financial goals. Contact us today to discuss whether refinancing could save you money and improve your monthly budget.
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