Can You Refinance a Car Loan With the Same Lender?
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Is It Possible to Refinance With the Same Lender?
When Does It Make Sense to Refinance?
You Now Qualify for a Lower Interest Rate
You Have a Helpful Cosigner
You Want to Lower Your Monthly Payment
Your Car Is Aging or Has High Mileage
Is It Easier to Refinance With Your Current Lender?
How to Refinance With the Same Lender
The first step is to gather the required documentation. Even if you have a history of making your car payments on time, you’ll still probably need to provide proof of income. This could be recent paystubs or a tax return. You may also need to confirm and update your personal information, including your address and how much you spend on housing each month. The lender likely has other details about your current loan and vehicle. Nonetheless, it will probably pull a credit report to see where you stand today. Your credit score may drop by a few points if the lender conducts a hard pull inquiry into your credit report. You may receive a loan offer based on your personal information and your vehicle information. The offer may include an interest rate, any fees, and the length of the loan term. Review all of these details and compare this offer to offers from other lenders to see which is the best option for you.
How to Refinance With a Different Lender
For a new lender, you may need to bring a little more documentation to your application when applying. In addition to the financial and income verification you need to apply with your existing lender, a new lender will likely need information about your vehicle and current loan. The new lender will likely need details about your vehicle, including the make, model, and year. You must also disclose the vehicle’s mileage and supply the lender with the vehicle identification number (VIN). Additionally, you’ll probably be asked to supply the loan balance and lender’s contact information. The application may also require you to submit proof of auto insurance. The lender may check your credit report. This can result in a small, temporary drop in your credit score. But if there are multiple credit inquiries for the same kind of loan within a short period of time on your record, they’ll typically be counted as just one, since the credit score agencies understand that you’ve been shopping to find the best rates. Some lenders may allow you to prequalify for a loan, which won’t typically result in a credit drop. But note that the offers you see that way aren’t guaranteed, especially if your financial situation changes before you actually apply for the loan. Once you’ve selected the loan you want to apply for, the process will be similar to that when you apply with the same lender, except that when you’ve received and accepted the loan terms, your new lender will transfer the funds to pay off your old loan and your new payments will begin.
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