What is the auto refinance process?

What is an auto refinance? Refinancing your auto loan is a very simple, straightforward process. You essentially apply for a new auto loan, which pays off your current loan. This results in a new interest rate, a new loan agreement, and a new loan term (the length of your loan in months).

What factors go into refinancing a car?

Vehicle Value The make, model, trim, features, mileage, and age of your vehicle are all factors that affect refinancing approval rates. The value is important because the lender wants to make sure they aren’t lending too much compared to what the vehicle is worth.

What does a refinance entail?

Refinancing a loan allows a borrower to replace their current debt obligation with one that has more favorable terms. Through this process, a borrower takes out a new loan to pay off their existing debt, and the terms of the old loan are replaced by the updated agreement.

Does refinancing lower your car payment?

Refinancing and extending your loan term can lower your payments and keep more money in your pocket each month — but you may pay more in interest in the long run. On the other hand, refinancing to a lower interest rate at the same or shorter term as you have now will help you pay less overall.

Can you refinance a car loan immediately?

You do not need to wait any minimum amount of time before refinancing your car loan. Refinancing is possible immediately after buying—even before you make your first monthly payment. Just be sure that you actually end up with a better deal, and that refinancing doesn’t cause you to pay more for your vehicle.

When you refinance a car does the loan start over?

Refinancing starts your auto loan over. When you refinance your auto loan, you choose a new loan that has a different rate and term; that new loan replaces your current loan. Refinance terms offered by lenders most commonly are from two to seven years.

How long is the process to refinance a car?

The process may take up to 15 business days. You can watch one of our members explain the process in the video below. Sometimes, we may need more information to complete your application. To speed the process along, upload any requested documents as soon as possible.

How long should you pay on a car before refinancing?

Rule of Thumb of When to Refinance a Car Loan

1. Wait at least 60-90 days from getting your original loan to refinance.
2. Consider refinancing after six months.
3. If you are a first-time car loan borrower, wait at least a year to refinance your loan.