Factors That Affect Auto Refinancing

Factors That Affect Refinancing


Several Factors That Affect Auto Refinancing


Have things changed since you first purchased your vehicle? Have you increased your credit score and lowered your debt-to-income ratio (DTI)? Great! You may be able to refinance your auto loan and save some money! Refinancing your auto loan can help in other ways as well. You could add or remove a co-borrower or even buy out your lease. For a full list of ways that we could help, visit our solutions page. The bigger question we hear though: “What are the odds that I will be approved to refinance?” To help bring guidance to this question, we want to inform you about some of the different factors that affect auto refinancing approval odds.

Credit Score

Your credit score is very important for many reasons. Refinancing your auto loan is no exception. Not only does your credit contribute to getting approved for a loan, but it also affects what interest rate you are offered. Most lenders have a threshold number that they won’t go below.  Above that threshold, they may use credit score as a factor in setting the terms of the loans, such as the interest rate and the amount they will finance. Before you apply for a new loan, you need to decide what your goal out of refinancing is. If you are aiming to lower your interest rate or monthly payment, make sure you work on your credit score first.

Credit Score

Your Score and More

Your credit score is one of the most popular answers people give when asked what they believe affects their chances of approval. Although this is one large factor in getting approved, it is not the only one! Some other factors that affect refinancing approval odds include debt-to-income (DTI), pre-tax income (PTI), and vehicle value. So, what do each of these really mean?

Debt-to-Income Ratio

Your debt-to-income ratio is an indicator of your ability to pay your car loan.  DTI is calculated using the information on the credit bureau about how much you pay monthly for your obligations versus your monthly gross income.  The good news is that if your DTI doesn’t qualify now, as you pay down your debts, and carefully manage how many new debts you incur, your DTI can improve. With a lower DTI, the lender sees you as less risky to provide a loan to. This explains why your debt-to-income ratio is a large factor that affects refinancing approval odds. For guidance, take a look at another blog on paying off debt.

Debt-to-Income Ratio

Pre-tax Income

Lenders want to make sure the new loan payment is less than what you can afford each month.  If your payment on the new loan is too high compared to your monthly gross income, there may be ways to adjust the payment amount. Some ways include getting a smaller loan and getting a longer-term, so you are spreading payments out over more time. This typically lowers the monthly payment. Although this is a factor that affects refinancing approval rates, it is a great way to know when is the right time to refinance. So, if you recently received a raise or took a higher paying job, you may be in a great spot to refinance.

Pre-Tax Income

Vehicle Value

What is your car worth? This is a question lenders are going to ask when determining if they will offer you a new loan. The make, model, trim, features, mileage, and age of your vehicle are all factors that affect refinancing approval rates.  The value is important because the lender wants to make sure they aren’t lending too much compared to what the vehicle is worth.  Lenders will typically lend more than the value of the vehicle, assuming other loan factors mitigate the risk. So, sadly, that 1990 Ford Mustang probably isn’t going to be approved to refinance.

Vehicle ValueCredit and the Other Factors That Affect Auto Refinancing Are All Important

In conclusion, there are more factors that affect refinancing approval odds than just your credit score. Debt-to-income ratio, pre-tax income, and vehicle value are just three other factors to keep in mind. You can see a list of factors on our “Am I Eligible” page by clicking here.
We know you work hard to improve your credit and lower your debt. So you should be rewarded! Refinancing your auto loan could save you thousands of dollars per year.  Get Started Now on refinancing your auto loan, you deserve it!

Important Disclosures and Requirements

Customer Consent to Receive Account Information Electronically

The Electronic Signatures in Global and National Commerce Act requires your consent to receive certain disclosures electronically. Please read this section carefully and retain a copy of this document for your records.


Some communications and disclosures with and by RefiJet.com on its behalf and on behalf of participating banks, finance companies, and credit unions (hereinafter called “Lenders”) are conducted electronically. However, if you wish to obtain a paper copy of any disclosure to your offer and/or loan/finance offer request, you may write to Yield Solutions Group, LLC (dba RefiJet.com) at 7555 E. Hampden Ave., Ste. 500, Denver, CO 80231. We will not charge you a fee for a paper copy of the Disclosures you request. RefiJet does not provide any Lenders’ disclosures.

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The applicant and any co‐applicant (collectively, “you”) must consent to receive Disclosures electronically in order to complete the loan/finance offer request process with RefiJet.com on behalf of its participating Lenders (as defined above). Your consent will apply to Disclosures you receive from RefiJet.com, its successors and assignees, and any Lenders. You may withdraw your consent for receiving electronic Disclosures by notifying RefiJet.com at Info@RefiJet.com. Since RefiJet.com is structured to provide some loan/finance offer request related information electronically, not consenting, or withdrawing your consent to receive electronic Disclosures may terminate your loan/finance offer request process. You may withdraw your consent to do business electronically with our participating Lenders at no cost to you. You may do so by contacting the Lender at the mailing address, e‐mail address or telephone number they provide to you separately for such purpose.


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Please notify us at 1.800.260.5355 if your contact information changes at any point in the refinance process.


This average monthly auto loan payment savings reflects loans where the borrower chose to lower their monthly payment. Not every auto refinance is intended to lower monthly payment. These savings are not guaranteed. Individual savings and rates may differ.

2018‐10‐08 02:30PM MST