The average loan for new passenger vehicles surpassed $32,000 in 2019, with the average first-time monthly loan payments rising to $554. Coupled with high APRs and lengthy loan terms, countless Americans pay thousands towards the interest on their loan alone.
Like many Americans, you may be asking, “Can you refinance a car loan?”
Refinancing options can be used to reduce your monthly payments, lower interest rates, and renegotiate your auto loan terms.
Knowing When You Can (and Should) Refinance a Car Loan
Knowing when you can and should refinance an auto loan will help you save more money and get the loan terms that are right for you. If you’re currently paying a high APR or high monthly payments, consider refinancing options if:
- Your income has increased, or your debt to income ratio has been reduced
- Your credit score has gone up since you applied for your initial loan
- You have someone willing to cosign your auto loan
- You financed your current car loan through a dealership
For the best time to refinance your car loan, avoid the weeks after hard credit checks or starting new loans, as these can impact your credit score and credit history. Before refinancing, it’s also worth taking the time to review your current loan terms. Some lenders penalize borrowers for repaying their auto loans too early. If your lender would penalize you for refinancing with another lender, compare your potential savings against your current lender’s fee.
What You Need to Refinance a Car Loan
Now that you know if you can refinance a car loan, it’s essential to review your options and gather your financial records. To refinance an auto loan, you will need:
- Wage statements, such as pay stubs, W2s, or tax returns
- Your vehicle’s information, including your Vehicle Identification Number (VIN) and the make, model, and year of your vehicle
- Your current loan details, including your lender’s name and current loan amount
- Your personal information
If you have someone to cosign for you, you will also need their personal and financial information. Your cosigner must also be present when you apply to refinance your auto loan.
Refinance Your Auto Loan with Vantage Finance
If you’re paying more than you can afford on your auto loan, it may be time to review your options. Refinancing a car loan can help you reduce monthly payments, reduce your interest rate, and alter your loan terms. Luckily, you can refinance your car loan in a few simple steps.
