How to Refinance a Honda Financial Auto Loan

Refinancing your Honda can be an effective way to lower your costs by shrinking your monthly payment or cutting the overall interest you pay. However, you can’t refinance with Honda Financial Services. Honda’s captive financing provides loans for new vehicles, but it doesn’t offer refinancing for existing loans. If you took out your loan through the dealership when you bought your car, you’ll need to find a third-party lender for a refinance loan.

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Fortunately, you have multiple options for fast online auto refinancing. Below, we’ll go over the process to refinance a Honda and lay out which steps to take next.

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Key takeaways

• Honda Financial does not refinance existing auto loans.
• If you have an auto loan with Honda Financial Services, you’ll need to refinance with a third-party lender.
• Before you refinance, make sure you have your loan documents and vehicle information handy.
• Always shop around for multiple loan offers before refinancing so you find the best fit for your needs.

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Does Honda Financial refinance?

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Honda does not refinance its existing auto loans. Even if you purchased and financed through a Honda dealer, you won’t be able to refinance with Honda Financial Services. The company’s finance arm, American Honda Finance Corporation, provides financing for purchases and leases only.

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While Honda often offers promotional rates and extended terms to make it easier for buyers to purchase a Honda, it doesn’t change loan terms after the fact. Once you’ve taken out a loan through Honda Financial Services, you’re set with those loan terms unless you refinance your auto loan with a third-party lender. 

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Can you refinance a Honda loan with another lender?

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If you’d like to change your loan terms, you can refinance your Honda with another lender. That’s the best way to change your loan term, interest rate, or monthly payment. What you’ll need to do is compare loan offers from banks, credit unions, and online lenders to find a refinance loan that fits your needs. 

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The benefit of using another company to perform a Honda Financial refinance is that you’ll be able to pick and choose the best loan for your budget and financial goals. As you’re shopping for a new lender, make sure you compare the following elements of each loan offer:

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• Interest rate
• Loan term length
• Monthly payment
• Fees
• Total interest 
• Prepayment penalties, if any
• Mileage or vehicle age restrictions, if any
• Minimum required credit score

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Look at the annual percentage rate (APR) of each loan; this number shows you the cost of borrowing with fees included, making it the most apples-to-apples way of comparing rates.

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Also keep in mind that different lenders have different loan terms and conditions. For example, some lenders won’t refinance a car that’s older than 10 years. Others won’t refinance a loan with less than 12 months remaining. You’ll need to make sure both you and the vehicle qualify for the refinance.

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Why drivers refinance Honda Financial auto loans

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Honda drivers refinance their auto loans for the same reasons other drivers do: better affordability and lower costs. Pursuing a refinance of your Honda Financial Services loan can help you:

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• Lower your monthly payments
• Lower your interest rate
• Shorten or extend your loan term
• Reduce your overall interest costs

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Some drivers also choose to refinance a Honda Financial loan because they have a lender they prefer better, whether it’s their local credit union or another bank. 

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The effect of a refinance on your budget and your overall costs depends on the exact terms of your current loan compared to a new refinance loan. For example, shortening the loan term could drive up your monthly payment but slash interest costs, while lengthening the loan term could have the opposite effect.

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What you’ll need to refinance a Honda Financial Services loan

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When you’re ready to refinance your Honda Financial auto loan, gather the following details and documents before you get started:

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• Credit report: If your credit score has improved since you first took out your loan, you may be able to qualify for a lower rate or better terms.
• Information on your current loan: Note the interest rate, loan amount, loan term, monthly payment, and loan payoff amount.
• Proof of income: Your paystubs, recent bank statements, and tax returns are usually good proof of your current income for lenders.
• Proof of identity: Your driver’s license and Social Security number help lenders know it’s really you.
• Proof of insurance: Your valid insurance card will do.
• Vehicle details: Have your vehicle identification number (VIN), mileage, make, and model ready, plus the registration and title information.

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Steps to refinancing your Honda

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Refinancing involves applying for a new loan, which you will then use to pay off your existing loan. Here are the steps you’ll follow:

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1. Shop around for loan offers. Comparison shopping ensures you’ll find the best loan for your situation, so check rates with multiple lenders. Keeping all your inquiries to within a two-week period ensures they count as just one credit inquiry.
2. Compare rates, terms, and payments. Don’t forget to check fees and penalties, too.
3. Submit your application. Applying online takes just a few minutes, and you can upload your documents electronically.
4. Wait for approval. This can take anywhere from a few minutes to a few weeks as the lender checks your credit and verifies your information.
5. Sign your loan paperwork. Once you’re approved, sign the loan agreement and finalize the loan.
6. Pay off your Honda Financial loan. You can do this yourself with the loan proceeds, or sometimes the lender will do it for you.
7. Set up payments to your new lender. Use automatic payments or monthly reminders to ensure you don’t miss a payment.

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Shop around to save on your refinance

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Refinancing can often help you improve your financial situation, but you should always run the numbers first to be sure. An auto refinancing calculator lets you enter your loan amount and interest rate so you can see how much you might save with a new loan. When you’re ready to move forward with a Honda Financial refinance, compare offers from multiple lenders — at least three, if you want to find the best deal. 

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Many drivers prefer shopping for an auto refinance loan online, where they can see multiple rates and payments side-by-side. Then, when you find the right fit, all you have to do is apply. 

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FAQs

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See below for answers to some of the most common questions about refinancing a Honda Financial Services auto loan.

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Does Honda Financial Services refinance auto loans?

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No, Honda Financial does not refinance existing auto loans. The company only offers new auto loans for Honda vehicle purchases.

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Can I refinance my Honda loan with another lender?

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Yes, refinancing your Honda with a third party is the best option for getting improved loan terms. You can find auto refinance loans at banks, credit unions, and online lenders, though rates and terms will vary.

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Will refinancing my Honda loan hurt my credit score?

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Any time you apply for credit, the lender will run a hard credit inquiry. These credit checks may temporarily drop your credit score, but most people only see a dip of around five points.

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What do I need to be able to refinance my Honda auto loan?

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Make sure you have your driver’s license, insurance card, VIN, plate number, and loan details when you’re ready to apply. You’ll probably also need paystubs, bank statements, or tax return information, too.

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