The process for refinancing a car loan is similar to when you applied for your original car loan. Expect to provide your credit and vehicle information. Once your loan is approved, your loan provider may ask for additional information, such as proof of income or residency. Prepare yourself for the loan application process by having your information ready.
Loan Pay Off Amount
To determine the amount to apply for when refinancing, call your lender to obtain your car's payoff amount. Ask your lender to also provide you with your loan's per diem amount, or the amount of interest charged to your account daily. Unless you have a 0 percent loan, your per diem charges can exceed $10 each day. Discuss any loan payoff procedures with your lien holder, such as its process for lien or title release. Also ask if your lender charges any penalty fees for paying off the loan early.
Vehicle Information
Your new lender requires your vehicle information to determine how much you can borrow. Have your vehicle identification number (VIN) ready, which you can find on an insurance card or title. Also have your car's year, make and model information ready. Check your car's current odometer reading, which affects the loan value of your vehicle. Check your car for add-ons or additional features, such as a sunroof, advanced audio system, leather or heated seats, side-steps, a roof rack or DVD player; these items increase your car's value.
Credit Information
Expect to provide detailed personal and employment information for your credit application. Have your employer's name, address and contact information ready to provide your loan representative. Figure your gross annual income based on your most current pay stub; your lender likely requires a copy of your pay stub, known as proof of income. You'll also provide your name, time at current address, social security number and date of birth. Some lenders require references, so have at least three people's names, addresses and phone numbers ready to offer.
Proof of Insurance
Once your refinance loan is approved, expect to provide your lender with proof of adequate insurance coverage. Your lender should provide further information regarding your limits and deductible requirements. Most auto loan providers require full-coverage insurance, so you may not have to make a change to your policy coverage because of your previous lender's requirements. Obtain your new lender's name and address to provide to your insurance company, as your new lien holder must be listed as the policy holder's loss payee.
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