How to Refinance an Auto Loan: What You Need to Know
Refinancing your auto loan might sound complicated, but it’s a simple process that can save you money. Whether you want a lower monthly payment, a better interest rate, or a shorter loan term, refinancing can be a smart financial move—especially when you work with a credit union you trust.
Here’s what you need to know about how to refinance an auto loan, and how Northwoods Credit Union can help you get started.
What Does It Mean to Refinance an Auto Loan?
Refinancing an auto loan means replacing your current car loan with a new one. The new loan pays off your original loan, and you begin making payments on the new terms. This can be a good idea if your credit score has improved, interest rates have gone down, or your financial situation has changed.
Why Consider an Auto Loan Refinance?
Refinancing can offer several benefits, depending on your needs:
- Lower your interest rate – A better rate could mean paying less over the life of your loan.
- Reduce your monthly payment – Stretching out your loan term could lower what you owe each month.*
- Pay off your loan faster – Shortening your loan term can help you become debt-free sooner.
- Switch lenders – If you’re not happy with your current loan, refinancing gives you a fresh start.
*Extending your term may increase the total interest paid over time.
When Is the Right Time to Refinance?
It might be a good time to consider auto loan refinance if:
- Your credit score has improved since you got your current loan.
- Interest rates have dropped.
- You’re struggling with your monthly payments and want to try and lower them.
- You’re unhappy with your current lender’s service or loan terms.
How to Refinance an Auto Loan in 5 Simple Steps*
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Check your current loan details
Know your current interest rate, monthly payment, and payoff amount. -
Review your credit score
A higher score may help you qualify for better rates. -
Compare
Look at rates. Use our free calculators to easily see payment examples today. -
Apply for pre-approval
At Northwoods Credit Union, our loan officers can walk you through the process and explain your options. -
Close your new loan
Once approved, your new lender pays off your original loan, and you begin making payments on the new car loan.
Why Refinance with a Credit Union?
Choosing a credit union like Northwoods Credit Union comes with a few extra perks:
- Competitive rates that are often lower than big banks
- Local service from people who understand the needs of our Minnesota communities
- Flexible terms to fit your lifestyle and budget
- Personal guidance—we’re here to answer your questions and help you make confident choices in person or online
Ready to See If Auto Loan Refinance Is Right for You?
Refinancing your car loan doesn’t have to be stressful. At Northwoods Credit Union, we’re committed to helping our members around Cloquet, Floodwood, and Moose Lake get the best deal possible.
Have questions? Ready to get started?
Contact us today or stop by your local branch to talk with us. We understand you are more than a credit score and work with you.
You can also view all of our loan options here.
*Not all applicants will qualify. Membership eligibility required. NCU is insured by NCUA.