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Thinking about refinancing your auto loan? Whether you’re hoping to lower your monthly payment, reduce your total loan cost, or both, refinancing might be the solution.
The process typically starts with shopping around and gathering pre-qualification loan offers from multiple lenders. Once you’ve compared your options and identified the best deal, the next step is to get pre-approved. But what’s the difference between a pre-qualification and pre-approval when refinancing a car loan? Let’s break it down.
Pre-qualifying for an auto loan refinance means that, after performing a soft credit check and reviewing information you self-report, an auto refinance lender has determined that you likely qualify for certain loan terms.
A pre-qualification offer often includes the requested loan amount (the outstanding balance on your current auto loan), along with the estimated interest, term and monthly payment you can get. For example, you might pre-qualify for a $21,000 loan with an 8% APR, 40-month term and $600 monthly payment.
The more accurate the information you provide on your application, the more reliable your pre-qualification offer will be. However, these offers are subject to change based on information collected during the final application, verification of the information you provided, and the sole discretion of the lender.
To pre-qualify with an auto refinance lender, you usually need to fill out a short application that requests your name, address, income, housing expenses and employment situation. Lenders also typically perform a soft credit check.
Pre-approval for an auto refinance loan comes after you’ve completed the full application and the lender has verified all the information you provided. If the lender determines you’re still likely to qualify, you’ll be pre-approved for specific loan terms. The pre-approval is often valid for a certain amount of time, such as 30 to 60 days.
While similar to a pre-qualification offer, a pre-approval for auto loan refinancing carries more weight. It’s only provided after an applicant has been further vetted and their self-reported information has been verified. However, it’s still conditional and subject to change before the final approval.
Pre-qualification and pre-approval tend to go hand in hand when you’re looking to get an auto loan or auto refinance loan, but each plays a different role in the process.
Here’s a closer look at the key differences between the two and when to use each.
If you want to get pre-approved for an auto refinance loan, you’ll typically need the following documents:
Documentation requirements can vary by lender, but these are the commonly requested items.
If you’re considering refinancing, it’s important to shop around. Comparing multiple pre-qualification offers will help you find a competitive deal without hurting your credit score.
The good news is you don’t have to search for lenders and fill out dozens of pre-qualification forms one by one. With RefiJet, you fill out one form and we’ll check if you pre-qualify with a pool of reputable lenders within minutes. Then, you can sit back and review your options side by side to find the one that provides the best value for your situation.
Learn more about getting pre-approved for an auto refinance loan.
Pre-approval for auto loan refinancing generally refers to a lender determining you qualify to refinance your vehicle after reviewing your application, checking your credit and verifying the information you provide. The process typically involves a hard credit check and providing other required documentation, such as bank statements, odometer readings and your vehicle registration.
Pre-approval is a strong indicator that you’ll be approved to refinance according to the rates and terms provided, assuming nothing changes before the offer expires. However, final approval isn’t guaranteed until you’ve completed all the steps in the application process and signed the loan agreement.
Auto refinance pre-approval can take anywhere from a few hours to a few days, depending on the lender and how quickly you submit required documents. If you apply online and have your documents ready (like pay stubs, registration and insurance), some lenders may issue pre-approval the same day, while others may take a few business days.
The documents you need to get pre-approved for an auto refinance loan can vary from one lender to the next. However, they often require a valid driver’s license and vehicle registration, an odometer photo, proof of insurance, proof of income, proof of residence and your vehicle title.
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