13 Frequently Asked Questions about Car Refinancing

Here are some of the most popular questions people have about car refinancing:



1: What is car refinancing?

• Car refinancing involves replacing your existing car loan with a new loan, usually with better terms like a lower interest rate or different repayment period.

2: Why should I refinance my car loan?

• Refinancing can help lower your monthly payment, reduce the interest rate, shorten the loan term, or even change your loan type, depending on your financial situation.

3: When is the best time to refinance my car loan?

• It's typically best to refinance when your credit score has improved, interest rates have dropped, or you want to adjust your loan term.

4: How much can I save by refinancing my car loan?

• Savings depend on factors like your current interest rate, the new rate you qualify for, the term of the loan, and the remaining balance. Refinancing can save you hundreds to thousands over the life of the loan.

5: Will refinancing affect my credit score?

• Refinancing can temporarily lower your credit score due to the hard inquiry, but if you continue making timely payments, your score could improve in the long run.

6: Can I refinance my car loan with bad credit?

• It is possible, but you might not qualify for the best rates. Some lenders specialize in refinancing for people with less-than-ideal credit.

7: How do I qualify for car loan refinancing?

• Lenders typically require that your car is no more than 10 years old, the loan is in good standing, and you have a stable income, good credit, and a reasonable debt-to-income ratio.

8: What is the minimum credit score to refinance a car loan?

• While the minimum credit score varies by lender, a score of around 600 or higher is often needed to secure a good refinancing deal. Some lenders offer options for those with lower scores, but the interest rates may be higher.

9: Can I refinance a lease?

• You generally can't refinance a lease, but you can buy out your lease and then refinance the loan for the car.

10: Are there fees associated with refinancing my car loan?

• Some lenders may charge fees for refinancing, such as application fees, title fees, or prepayment penalties, so it’s important to review the terms before moving forward.

11: How does refinancing affect my loan term?

• When refinancing, you can adjust your loan term to suit your financial situation. You might choose a shorter term to pay off the car more quickly or a longer term to reduce monthly payments.

12: Is it better to refinance through my current lender or a new one?

• It's generally a good idea to shop around and compare rates from both your current lender and other financial institutions. Sometimes your current lender may offer loyalty discounts or incentives to keep your business.

13: Can I refinance if I’m upside down on my loan (owing more than the car is worth)?

• It can be more difficult to refinance in this situation, but some lenders may allow it, especially if you have a good payment history and can show your financial stability. However, you may need to pay the difference upfront or roll it into the new loan.
  

1. Apply online

Confirm your VIN and provide some details about the vehicle you're looking to refinance. We may ask for pictures of your vehicle.

2. Sign documents

Sign online without ever leaving home. Once your rate and pre-approval have been secured, your Finance Manager will send you documents via DocuSign to review and sign.

3. Get money

Reduce your payments with decreased interest rates. Plus, you can postpone Payments for 6 Months and Receive Cash Back of Up to $30,000!