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What Documents Do I Need to Refinance a Car Loan?

  • Auto Refinance
  • Renee Martin
  • 6 minutes

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Don’t tire yourself out searching the internet for queries like “What do you need to refinance a car” – we’ve got you covered!  Find out what you need to have in hand before applying for easy auto refinancing.

Taking out any kind of auto loan is usually perceived to be a Herculean task. That’s because most companies ask for a mountain of details and documents before you can even apply to refinance your car! Everyone has gone through it at least once – there’s personal information, loan details, vehicle documents, insurance documents – the list seems endless!

However, we’re here to tell you that the list is NOT, in fact, endless. To get the best rates and benefit from refinancing, you need to know what lenders are looking for, and it makes sense to have some details ready at hand. We’ve created a comprehensive list of everything you may need to refinance your car below.

Pro Tip: Keep three types of information ready – your personal details, your vehicle’s details like registration and insurance, and the previous loan documents. This will significantly improve reference time and smoothen the application process!

What Is Auto Refinancing? 

Auto refinancing is the process of replacing your existing car loan with a new loan that has better terms and conditions. The new loan helps pay off the remaining amount on your previous car loan, after which you start paying monthly payments on the new loan – ideally with a lower interest rate.

The advantage of car refinancing is that you can get a new loan with a lower APR (Annual Percentage Rate) or a lower monthly payment, which can help save money in the long run. Auto refinancing is also useful for people who want to add/remove a co-signer to their loan or make changes to their current loan so as to rationalize their expenses.

When Can You Refinance a Car? 

It’s a good time to refinance your car if you find yourself in any of the situations below:

  • If your credit score has improved 
  • If you’ve become eligible for a better loan 
  • When your monthly expenses have increased and you want to save money
  • If you want to add a co-signer to your loan 
  • If your car has become old and is not worth the high monthly payments 

What do you need to refinance a car? Cut the clutter with Way.com

What Personal Information Do You Need to Refinance a Car? 

To make your refinancing application process smoother, here are the Personal Documents needed to Refinance a Car:

  • Driver’s License 
  • Social Security Number
  • Your credit score: Ideally above 660. Many credit bureaus offer a free credit report every year. 
  • Proof of Income: May include pay stubs, tax returns, and proof of employment. This is important because the APRs can vary depending on whether you are permanently employed, self-employed, or are freelancing.
  • Proof of Residence: Lenders accept mortgage statements, auto insurance policies, utility bills, property tax bills, or bank statements.

A man entering information to refinance a car loan

What Is the Vehicle Information Needed to Refinance a Car?

  • Vehicle Identification Number (VIN)
  • Make and Model
  • Year
  • Title
  • Proof of Car Insurance

Most of these details are included on your vehicle registration card.

Loan Documents needed to Refinance a Car

A man with a list of documents to refinance a car loan

Your refinance lenders will need to know the details of the current car loan to analyze whether you’re fit for refinancing. This includes:

  • 14-day payoff amount: The amount you owe to completely pay off the existing loan
  • Car Loan-to-value ratio: Ensure that you are not “underwater” on your car loan (owing more than what the car is worth). This can be helpful if you need cash-out auto refinancing.
  • Loan term remaining:  Ideally, you should have more than a year left on the existing loan – otherwise, it may not be worth refinancing. 
  • Prepayment penalty: Ensure that your existing loan provider will not penalize you for paying off the loan early. 

The new refinance loan documents will include the following:

  • Your Credit Application with most of the data you have provided
  • One and the Same Agreement attests that you are the same person as mentioned in the document and any different versions of your name if any.
  • Note and Security Agreement is the actual agreement with the refinance lender. It mentions the loan amount, APR, and other fees.
  • Credit disclosure notice tells you how they used your credit score to finalize their offer
  • Odometer Check to attest the mileage of your vehicle
  • Military Lending Act Disclosure if you are a serving/retired member of the armed forces
  • GAP Contract  if you choose to add protection to your loan
  • ESC Contract to extend the warranty for any mechanical failure

What Is the Vehicle Information Needed to Refinance a Car?

Check whether your car meets the following vehicle criteria to be eligible for refinancing. 

  1. Vehicle Age: Most refinance will not refinance cars older than 12 years.
  2. Mileage: Any vehicle that has less than 150,000 miles on it can qualify for refinancing.
  3. Model and make: Some lenders will not refinance electric vehicles, hybrids, or models that have been phased out.

Frequently Asked Questions

Does Refinancing Require a Down Payment?

You don’t necessarily need to make a down payment to qualify for auto refinancing. However, if you want to qualify for refinancing even with a bad credit score, you can make a larger down payment so that lenders will be more confident of lending to you.

What score is needed to refinance a car? 

Many lenders have different requirements for refinancing an auto loan, but the majority demand the following: Wait at least 60–90 days after the original loan so that the vehicle’s title can be transferred. Meet the lender’s minimum credit score requirements (typically 660 or higher).

Does refinancing a car hurt your credit? 

Refinancing your auto loan is likewise a credit action because it entails canceling one account and starting a new one. According to common sense, it will harm your credit score. 

What do banks ask for when refinancing a car? 

Lenders judge eligibility differently. Check the requirements for you, your vehicle, and your current loan before you refinance. The majority of lenders will want a steady income, a low debt-to-income ratio, and excellent credit. 

Way.com, the all-in-one app, helps you find the best auto insurance, auto refinance, EV charging, gas discounts, best parking, and car washes near you.

 

 

 

 

 

 

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