Refinance your Auto Loan

Lower Your Auto Loan Payment

Auto loan refinancing involves taking out a new loan to pay off your existing car loan. The goal is usually to secure a lower interest rate, reduce your monthly payment, or adjust the term of your loan.

Refinancing might be right for you if interest rates have dropped since you took out your original loan, your credit score has improved, or you need to lower your monthly payment. It's also worth considering if you want to pay off your loan faster by shortening the loan term.

Checking your rate through NerdWallet’s platform won’t affect your credit score since it’s a soft inquiry. However, if you decide to proceed with a lender, they will perform a hard inquiry, which may cause a slight, temporary dip in your score.

The amount you can save depends on various factors such as your current interest rate, the new interest rate, the term of the loan, and any fees involved. Many customers save hundreds or even thousands of dollars over the life of their loan by refinancing.

Some lenders may charge fees for refinancing, such as an application fee, title transfer fee, or early repayment penalty on your original loan. It’s important to review the terms of your new loan to understand any associated costs.

Yes, you can refinance even if you have negative equity (i.e., you owe more than your car is worth). However, not all lenders offer refinancing options in this situation, and you may face higher interest rates or be required to roll the negative equity into your new loan.

The refinancing process can take anywhere from a few days to a couple of weeks. This depends on the lender, how quickly you provide the required documentation, and how fast the lender processes your application.

You’ll typically need the following documents: your current loan information, proof of income (e.g., pay stubs), proof of residence, and vehicle information (e.g., VIN, mileage). The exact requirements can vary by lender.

Yes, you can refinance a loan that was originally taken out with a co-signer. Depending on your financial situation, you may be able to refinance the loan in your name only, or you may need to retain a co-signer.

The best time to refinance is when interest rates are lower than your current rate or when your financial situation has improved (e.g., better credit score, higher income). Refinancing early in your loan term may yield the most savings.

Missing a payment on your refinanced loan can have serious consequences, including late fees, a negative impact on your credit score, and even repossession of your vehicle. It’s crucial to ensure you can afford the monthly payments before refinancing.

Yes, you can refinance your auto loan multiple times, but it’s important to ensure that each refinancing results in savings or better loan terms. Refinancing frequently may also lead to multiple hard inquiries on your credit report, which could affect your score.

Refinancing your auto loan typically does not require changes to your car insurance. However, your new lender may have specific insurance requirements, so it’s a good idea to review your policy and ensure it meets the new lender’s standards.

Some lenders have restrictions on the age or mileage of the vehicle they will refinance. It’s best to check with your chosen lender to see if your vehicle qualifies.

When choosing a lender, consider factors such as the interest rate, loan terms, fees, customer service, and the lender’s reputation. NerdWallet partners with trusted lenders to help you find the best option for your refinancing needs.