How to Qualify for Auto Refinancing

The primary reason to refinance an auto is to lower the interest rate and decrease the monthly payment on the vehicle. Qualifying for a refinance is similar to qualifying for financing a vehicle, so the lender is going to check your credit, ask for employment information and evaluate the value of the vehicle.

Instructions

1

Collect your credit report and score. One of the primary factors that determines your qualification for a refinance is your credit score. You can order your credit report and score from each of three credit agencies --- Experian, Equifax and TransUnion.

2

Obtain a payoff on your current auto loan. Call the current financing company for the vehicle and request the payoff amount. The payoff amount includes the total you owe, including interest, up to the date that the payoff amount is issued.

3

Gather interest rates, terms and qualification criteria from at least three auto financing companies, including your current lender, banks and credit unions. Interest rates and qualification criteria differ from one lender to another. When you contact lender write down this information for each one so that you can go back and choose the loan that is the best for your financial situation.

4

Go through the qualification criteria of each lender and make sure you meet each of the requirements. If for example, the minimum credit score is 720 and your score is only 700, then you either have to apply with a lender that accepts your credit score or work on boosting your credit score by clearing up negative items on your credit report and making all of your bill payments on time.

5

Put together a complete application package. When you choose a refinance company, obtain the application and the list of documents that you are responsible for submitting to the financing company. These documents may include a copy of your last two months pay stubs. Go line by line on the application to make sure that you fill in the information on all of the lines that apply to you. Go through the list and place a check mark next to the document as you add it to the application package to submit to the financing company.