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When you’re ready to refinance your car, it helps to know what to expect. One question many people have at the beginning of the process is, “How long does it take to refinance a car?”
Typically, auto loan refinancing takes about a week or two. However, your timeframe depends on how fast your lender processes the loan and how quickly your state transfers the title.
If you want to know how long a refinance will take, it helps to understand the approximate time frame for each step.
Completing a car refinance often takes two weeks or less from initial application to paying off your current loan. Here’s a typical breakdown of the timing:
There can be a lot of variation in how long it takes to refinance a car. There are usually several factors at play during each step of the refinance process.
Shop for lenders and prequalify to see your personalized rate. Prequalification usually takes just a few minutes. When you find a loan offer you like, fill out a formal loan application. Applying online is usually the fastest method.
Next, upload the documents required for refinancing, such as pay stubs, driver’s license, and insurance card. Your lender will let you know exactly what is needed. Send the requested paperwork to the lender as soon as you can to avoid delays.
Next, the lender will review the information you’ve provided. During this time, they will verify your identity, residence, income, and other details. Some lenders complete this process very quickly, in one to three days. After approval, you’ll receive your loan documents to sign. Once you’ve added your signature, the loan is finalized.
After approval, the lender will fund your loan. They’ll contact your current lender and apply the loan funds to pay off the old loan. Your old lender will apply the payment and release the lien. This could take up to 15 business days, depending on the lender’s speed in processing a payoff.
Once the lien is released and the old loan paid off, the new lender will request a title transfer from your state’s department of motor vehicles. The state updates the title to reflect the new lienholder, which is the refinance lender.
If your state uses an electronic lien and title program, the update can be handled quickly. If they’re updating a paper title, it could take as long as eight weeks (or more) to process.
Even as the title transfer is underway, you’ll need to make sure your very first refinance payment is on time. It’s typically due 30 days after loan approval. Some lenders may allow you to adjust your due date to better align with your pay schedule.
How fast you can refinance a car loan depends partly on you and how quickly you provide what’s needed. But there are some factors that are outside of your control.
Watch out for these common reasons your refinance could be taking longer than expected:
The right timing for a refinance may depend on your persona financial situation. If you’re not in a position to refinance now, then waiting for later could make sense. For example, if you just bought your car, or if the car’s value is lower than your car loan balance.
On the other hand, if interest rates have gone down or your credit score has gone up, you may be able to qualify for lower interest rates. In that case, you may not want to wait, especially once you know how long it takes to refinance a car.
RefiJet offers many different resources to help you learn more about refinancing, including how to know when it’s the right time to refinance. We can show you how to refinance a leased car or what impact refinancing can have on your credit. Check out our refinance resources to explore more.
The car refinancing process usually takes a total of one to two weeks to complete. However, there are many variables that could cause the process to take much longer, such as how quickly your lender can release a lien and how long it takes to transfer a title in your state.
First, shop for loan offers, prequalify, and fill out an application. Then upload your loan documents and wait for the lender to review. Once your loan is approved, the lender will apply the funds to your old loan to pay it off. That lender will work with the state to transfer title to your new lender. Then make payments to the new lender.
You’ll need proof of income, such as pay stubs or W-2s. You’ll also need your driver’s license, insurance card, and perhaps your current loan documents to determine the payoff quote.
Mistakes can definitely slow things down, but so can dawdling when you should be uploading your information and documents to the lender. If your state is slow to transfer titles, that can add time, too.
RefiJet can help you refinance a car fast. You can prequalify in just minutes using our online tools, and the total refinance time often takes two weeks or less. You might even be able to put off your loan payments for a few months, too.
How long does car refinancing really take? We break down each step of the process, what can slow things down, and how to get refinanced as quickly as possible.
