The Auto Refinance Process - A Brief Process Overview For Consumers Considering A Car Loan Refinance
Consumers refinance their vehicles for various reasons. Most are looking for a lower interest rate or a lower payment, some are looking to buyout their leased vehicle, and some refinance their car in order to manage special situations such as removing a party from the loan (e.g. due to death or divorce).
While not all lenders have exactly the same process for an auto refinance, below is what most lenders' processes have in common:
Step 1: The auto refinance process starts out with a loan application. Most lenders accept car refi applications through the internet, and some offer to take your application through the phone. Expect to spend only a few minutes on this process step - usually all you need is your personal and employment information, vehicle information, and current loan information.
Step 2: After getting approved for an auto refinance, auto lenders will reach out to you to let you know you're approved. This can be instantaneous through an internet decision page (if you applied online), an email or a phone call, or a combination of the above.
Step 3: Depending on the lender, there may be multiple that you can choose from. There could be different loan durations, interest rates to compare. Lately, some lenders have started to offer interest rate discounts for customers who sign up for automatic payments. So at the time of approval, you may even have to consider if that is an option for you in order to save some money.
Step 4: After selecting your offer, you will have to get a hold of the loan package that you need to complete. You will either receive a printed, physical package via mail or express service, or directly download it from the lender's website. Loan packages have multiple pages (expect around 10-15) and normally contain a contract (also called Note and Security agreement or NSA), a title application for your state's DMV, an odometer statement and various documents the lender needs to verify your information (references and work information). Also, there should be a form that allows your refinance lender to get a payoff quote from your existing lender. Some lenders will also require a power of attorney, which may or may not have to be notarized.
Step 5: The next step is completion of the loan package. The consumer needs to pay attention to the instructions, and be sure to sign wherever a signature is required. Mistakes in the loan package can delay the process, which may be costly because loan approvals are only good for a limited time (most lenders' approvals are good for 30 days, but some allow 45)
Step 6: The next step is that the lender verifies the information provided by the applicant. Depending on the lender's risk assessment, this may include employment verification, residence verification, verification of references and more. After having satisfactorily verified everything, the lender will get an accurate payoff from your current lender and payoff your existing loan.
Step 7: Last but not least, expect to receive a Welcome Letter or Welcome Email to confirm that your auto loan refinance has been completed.
While not all lenders have exactly the same process for an auto refinance, below is what most lenders' processes have in common:
Step 1: The auto refinance process starts out with a loan application. Most lenders accept car refi applications through the internet, and some offer to take your application through the phone. Expect to spend only a few minutes on this process step - usually all you need is your personal and employment information, vehicle information, and current loan information.
Step 2: After getting approved for an auto refinance, auto lenders will reach out to you to let you know you're approved. This can be instantaneous through an internet decision page (if you applied online), an email or a phone call, or a combination of the above.
Step 3: Depending on the lender, there may be multiple that you can choose from. There could be different loan durations, interest rates to compare. Lately, some lenders have started to offer interest rate discounts for customers who sign up for automatic payments. So at the time of approval, you may even have to consider if that is an option for you in order to save some money.
Step 4: After selecting your offer, you will have to get a hold of the loan package that you need to complete. You will either receive a printed, physical package via mail or express service, or directly download it from the lender's website. Loan packages have multiple pages (expect around 10-15) and normally contain a contract (also called Note and Security agreement or NSA), a title application for your state's DMV, an odometer statement and various documents the lender needs to verify your information (references and work information). Also, there should be a form that allows your refinance lender to get a payoff quote from your existing lender. Some lenders will also require a power of attorney, which may or may not have to be notarized.
Step 5: The next step is completion of the loan package. The consumer needs to pay attention to the instructions, and be sure to sign wherever a signature is required. Mistakes in the loan package can delay the process, which may be costly because loan approvals are only good for a limited time (most lenders' approvals are good for 30 days, but some allow 45)
Step 6: The next step is that the lender verifies the information provided by the applicant. Depending on the lender's risk assessment, this may include employment verification, residence verification, verification of references and more. After having satisfactorily verified everything, the lender will get an accurate payoff from your current lender and payoff your existing loan.
Step 7: Last but not least, expect to receive a Welcome Letter or Welcome Email to confirm that your auto loan refinance has been completed.