Is refinancing a car loan always a good thing?

"What's the downside of refinancing your car? I bought a car two years ago and am constantly getting refinancing offers. I heard that doing this can allow you to change the terms and or the monthly payments of a car loan."

Answer
“As long as you refinance before most of the interest is paid on your original car loan, it may be worth your while.
Before refinancing, double check that:
  • there are be no fees to refinance the loan from either bank
  • you do not opt for a longer loan term
However, refinancing late in a car loan could mean that you actually pay more for your car than if you just stayed with your original new car loan.
Likewise, prepayment fees and lengthening the terms of the loan can have the same effect.”
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Johnny Puckett
Answered on Jun 25, 2021
Johnny Puckett is a freelance writer and automotive expert. He has contributed content to a number of some of the largest online publications, aftermarket automotive manufacturers’ sites, and automotive informational sites. His experience in the automotive and information fields informs his writing at Jerry. His automotive interests bleed into his free time, where he enjoys modifying his favorite cars and woodworking.
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