Before refinancing, check the requirements for you, your vehicle, and your current loan. The lender you choose will evaluate your vehicle, check your credit, verify your income, and ask you for proof of car insurance. You may need to submit recent payment receipts or W-2 forms from the past two years to assure the lender that you can make monthly payments. Refinancing an auto loan involves obtaining a new loan to amortize and replace.
the current one. You begin making payments on the new loan, which usually has a lower interest rate or a different repayment period. Completing an application for a car refinance usually takes less than an hour, and many lenders issue a loan decision right away. Your credit score is an important factor in determining how good your refinancing interest rate could be.
If you've improved since getting your original car loan, you may qualify for a higher APR on your refinance loan than on your original car loan. Check your credit score for free with LendingTree Spring. Refinancing your car loan can help you avoid a sky-high payment or interest rate, but some difficulties in the refinancing process could cause you to pay more than what is necessary.