What does refinancing a car mean?

"I purchased a car about a year ago. Because of my poor credit, my interest rate was 9.75%.

I was told to refinance my vehicle, but I'm not sure what this entails.

What does refinancing a car mean?"

“To refinance a car, you take out a new loan with a lower interest rate to pay off your older loan that has a higher interest rate. Benefits of refinancing can include a lower interest rate, a lower monthly payment, or even a different loan length.
The process of refinancing a car is the same as getting a car loan. You have to qualify for the loan just as you did the first time. The lender will pull a hard inquiry on your credit report, so be prepared for a slight hit to your score.
As you would with other types of loans, shop around to find the best interest rate possible.”
Eric Schad
Answered on Jun 17, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.

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