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Refinancing your car replaces your old car loan with a new one, often with a lower interest rate or smaller monthly payment. To qualify for auto refinancing, you’ll need to show the lender that your finances and your vehicle meet their loan requirements.
Lenders will want to know your credit score, income, vehicle info, and current loan details. They’ll ask to see things like your credit report, pay stubs, and current loan papers to make their decision. Knowing what documents you need to refinance your car can streamline the process when it’s time to apply.
The exact requirements to refinance a car vary from lender to lender. However, the guidelines below should give you a good idea of what a typical lender might require.
Essentially, the lender will want to know whether you have a solid history of repaying your debts and the income and ability to pay back the loan. They’ll also want to make sure that your current vehicle isn’t too old and that it doesn’t have too much wear and tear to be used as collateral.
Finally, the lender will want to review your current loan details to see how much you want to borrow and whether you’ve been making your payments on time.
By providing documentation, you can show the lender that you meet their requirements for refinancing and would make a reliable borrower.
Credit is one of the first things lenders check when you apply to refinance your vehicle, and income is usually close behind. Here are some of the usual financial requirements to refinance a car:
Most lenders don’t have public-facing minimum credit score requirements for refinancing a car. Instead, they encourage you to apply so they can assess your full financial situation. However, when they do set a minimum credit score, it’s often 600. This suggests that you may need to have a fair credit score or better to refinance your auto loan.
Before applying, check your credit to see where it stands and ensure everything on your report is accurate. You can get free weekly credit reports from the three major credit bureaus at AnnualCreditReport.com, and free credit scores from providers like Experian, Capital One and Equifax.
Better credit scores often lead to better interest rates. To see how those rates affect your loan options, use our auto refinancing calculator.
Lenders assess your debt-to-income (DTI) ratio — the percentage of your monthly income that goes towards recurring debt payments — to gauge your ability to afford a new loan. In most cases, they’ll prefer DTI ratios under 35%, but each lender’s requirements are different.
To calculate your DTI, divide your total monthly debt payments by your gross monthly income. For example, if your gross monthly income is $6,000 and your monthly debt payments total $2,000, your DTI ratio would be 33%. If yours is too high, you may need to pay off some debt before refinancing.
Beyond credit and income, auto loan refinance lenders will want to know about your vehicle. To ensure the car is suitable as collateral, they’ll typically want to see your vehicle:
Lenders commonly impose age and mileage restrictions on vehicles. In many cases, your vehicle must be less than 10 years old and have fewer than 100,000 to 150,000 miles to qualify.
That said, some lenders are more flexible, so you may still be able to refinance if your car is older or has higher mileage.
Some lenders place restrictions on the types of vehicles they refinance. For example, they may not allow certain makes or models. Many lenders only refinance personal-use automobiles, not commercial vehicles or other vehicle types like motorcycles or recreational vehicles. Further, vehicles typically won’t qualify if they’re salvaged, have branded titles or have a history of chronic issues.
The equity you have in your vehicle is another factor to consider. Lenders divide your outstanding loan balance by your vehicle’s current fair market value to get your loan-to-value (LTV) ratio.
If you owe more than your vehicle is worth, the negative equity may make it harder to get approved. Some lenders are willing to roll a limited amount of negative equity into a new loan, but others aren’t.
Lenders may have requirements for your current car loan, too, such as:
Some lenders won’t refinance their own loans or loans from lenders that don’t meet their requirements. For example, they may require issuing lenders to:
Check with potential lenders early to ensure your current lender qualifies.
Before you can refinance, your current lender must make sure their title transfer is complete. Once that’s done, you’ll be able to refinance with most lenders. Some may require you to wait a certain amount of time, such as one to six months. Others may not specify a certain time frame, but instead want to see an established track record of on-time payments.
Another common requirement for refinancing a car is what’s left on your current loan. Lenders want to earn enough interest from a new loan to make it worthwhile, so they often have minimum term and loan amount requirements. For example, a lender might only refinance loans of at least $5,000 that have at least 24 months remaining.
Payment history is also a common factor in refinancing. Lenders will usually be able to see the payment history on your current auto loan when they check your credit reports.
If you have missed or late payments, potential lenders may deny your application. Others may look for a certain number of on-time payments before they approve you.
So, what do you need to refinance a car? Here are the documents you should have ready to go and typical requirements for pre-qualification:
While these are common document requirements, check with specific lenders to confirm what they’ll need.
The refinance process is much like the loan process you followed to buy your car: shop around, compare offers, and fill out an application.
Here’s how it works step-by-step:
What you need to refinance a car varies by lender, so shopping around is key to finding the right fit. If you’re not sure the best way to choose a refinance lender, we can help.
RefiJet offers the resources you need to compare lenders and make a smart decision. We’ll show you what refinancing pre-approval involves, and why it’s an important part of the refinance process. We’ll also show you how to collect what you need, compare loan offers, and quickly apply for a refinance loan that fits just right.
Want to learn more? Here are answers to some common questions about what’s required when refinancing an auto loan.
You may be disqualified from refinancing your car loan for many reasons. For example, you could get denied if your credit score is too low, your LTV ratio is too high, you have late payments on your current loan or you have a vehicle over 10 years old.
There is no universal minimum credit score required to refinance a car. While a few lenders have minimum credit scores, often around 600, most don’t. However, you’ll generally need at least fair credit to qualify for favorable terms.
In general, you’ll need pay stubs or W-2s, insurance card, driver’s license, title (if applicable), vehicle registration, VIN, current loan documents, and proof of address, such as a utility bill.
When you apply to refinance a car, lenders generally check a variety of factors such as your credit, income, DTI ratio and LTV ratio. They may also consider details about your current lender, loan and vehicle.
Some lenders require you to wait six or 12 months first, while others want to see a solid track record of on-time payments before they’ll approve a refinance.
Yes, it may be possible to refinance a car when you’re upside down on the loan. Some lenders will refinance a vehicle with negative equity, though you might need a strong credit profile to do so. Another option is to pay down some of your balance before refinancing.
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