By Ben Payton () - April 10, 2018
When you refinance your auto loan, your old loan is paid off (through the new loan, but keep paying until the new loan is in effect), and a new loan is started. Your vehicle is collateral on the new loan. The new loan is with a new lender. The terms (APR, Term, Loan Amount, etc.) of the new loan may be different (and better!) than the old loan. For example, you might refinance to extend the term and lower your monthly payment, make a down payment so the amount financed is lower, or make another change so the new loan is a better fit for your financial situation. The new loan has a fixed interest rate and a fixed term so there are no surprises.
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