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What You Need to Refinance an Auto Loan

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What You Need to Refinance an Auto Loan

 

Refinancing your car is a lot easier and faster than doing a refinance on
your home. Refinancing your auto loan can save you money every month, lower the
interest you pay, and get your loan paid off faster so you can own your car
outright. Here is what you need to refinance your auto loan.

Vehicle Information

You'll need to provide the details on your current vehicle, including make,
model, and year. You'll also need to provide the vehicle's mileage and vehicle
identification number (VIN). Your car should have less than 75,000 miles on it
in order to qualify for a refinance. The lender will ask about the car's
features and special options or modifications. In most cases your car will need
to be no more than five years older than the current model year. 

Current Loan
Details

The new lender will need the balance on your current loan. You can call your
current lender to get a payoff amount. The payoff amount will usually be good
through a certain date, so make sure you pass that information along to the new
lender so everything gets done on time. If the payoff amount is incorrect, you
can end up with a bad mark on your credit that may take some time to straighten
out.

The new lender will need your current lender's name, address, and contact
information, as well as the account number for the loan.

Personal
Information

Since your new loan terms will be determined by your credit score, you will
need to provide your Social Security number. A FICO score of at least 720 will
give you the most favorable loan terms, including the lowest available interest
rates.

The new lender will need your current address and past addresses if you've
been at your current one for less than two years. You'll need to provide your
new lender with your employers name and contact information, and if you've
worked there for less than two years then you'll also need to provide
information on past employers. Sometimes lenders will call your current
employer to make sure you still work there. 

Employment verification is another requirement you'll have to meet. This can
be done through pay stubs or W2s. If you have a co-applicant, they will need to
provide all of the same personal information and employment and income
verification. 

Time Frame

Refinancing a car doesn't take weeks like home loan refinancing does, but
you'll need to allow for some processing time. Once you have gathered all of
the necessary information, you've completed your application, and you've
addressed any additional questions the lender may have, you'll need to allow
for an average of two to three business days to get everything finalized. Loan
documents can be signed in person or via U.S. mail, depending on the lender.

Refinancing your car can be a great way to achieve goals like paying off
your car faster, lowering your monthly expenses, or reducing your interest
rate. These tips will help you with what you need to refinance your auto
loan. 

"Refinance Key" by Got Credit, used under CC BY

Categories: Finance