Can You Refinance Your Car Loan With The Same Lender? [Expert Advice]


Many people will opt to refinance their car loans when they want to lower their monthly payments or save on interest costs.

But are you able to refinance your car loan with the same lender?

The answer is often yes, but in some cases, no – it all depends on your lender’s policies and whether they offer refinancing services.

Keep reading to learn more about whether you can refinance your car loan with the same lender and, if so, how to go about doing it.

What is Car Loan Refinancing?

When you refinance your car loan, you’re taking out a new loan to pay off an existing one.

In other words, you’ll be paying off your car loan with a new car loan.

That makes sense when you consider refinancing as a fancy way of saying getting a new loan, but why would someone do that? For starters, refinancing can help manage your cash flow in cases where monthly payments are too high for your current income.

For example, refinancing might be an option if you had to take out an auto loan with one lender and now want to get a better deal on loans with another lender.

Another reason for refinancing could be to lock in lower interest rates.

The idea behind refinancing a car loan is that you will save money. But can you refinance your car loan with the same lender? The answer is YES but it depends on a few things.

Most importantly,

  • how long do you plan to keep your car?

If you plan to trade it in within a year or two, it doesn’t make financial sense to refinance that loan.

Sure, you might get a lower interest rate or better terms – but then again, those are generalizations based on averages, and they don’t always hold in real life.

Reasons to Refinance your Car Loan with the Same Lender

Several reasons exist why you should refinance your car loan with the same lender.

Can You Refinance Your Car Loan With The Same Lender? [Expert Advice], JokosHQ

Let’s discuss a few of them here:

Secure financing is always there for you – When you need some cash to pay for an emergency, there is no better way to achieve it than by refinancing your car loan.

It will secure some cash so that you can achieve what needs to be done right away.

This assures that your car loan lender is also willing to lend you money when needed.

Get a lower interest rate – If ever you are finding yourself paying too much on your monthly instalment as a result of high-interest rates, then consider switching over from one lender to another so that you can get one with lower rates and favourable terms than before.

How to Refinance Your Car Loan with the Same Lender?

To refinance your car loan with a new lender, you’ll need to sell your vehicle to your lender in exchange for a check.

In some cases, it’s possible to refinance with the same lender. However, there are certain reasons why most people cannot do that: ・

You have made late payments. Your car loan interest rate will increase sharply if you miss one or more monthly payments.

Your monthly payment is higher than expected. Car lenders can usually re-calculate their estimates based on current financial conditions. Still, they won’t change their offer once approved and processed your application.

Your total debt load increases during the refinancing period.

When Does It Make Sense to Refinance?

When people say they want to refinance their car, they may mean many different things.

Refinancing is such a broad term that it can apply to various situations.

So if you’re going to refinance your car loan, it’s helpful to ask yourself why you’re considering doing so.

Do you want to lower your monthly payment, or do you feel like it’s time for something new and is you looking for an excuse?

Do you feel your loan balance is out of whack with how much your car is worth at trade-in time (and are thinking about moving into a newer vehicle)? Or do you have any other reason in mind that these examples may not cover?

These questions will help determine whether or not it makes sense for you to refinance your car loan.

Suggested: How Soon Can You Refinance Your Motorcycle Loan? A Honest Answer

Getting Pre-approved for Car Loan Refinancing

Getting pre-approved for a car loan refinancing is a good idea if you want to apply for a car loan refinance with your current lender.

Can You Refinance Your Car Loan With The Same Lender? [Expert Advice], JokosHQ

It can save you time and money, and it will help you get approved. Getting pre-approved is easy; all you need is to contact your lender to discuss how much you currently owe on your car and what kind of interest rate you’re paying.

They’ll check that against new rates on different loans, like an auto loan or a home equity line of credit (HELOC). If there’s something better out there, they’ll make sure that gets put in writing, so there’s no confusion about costs.

Possible Interest Rates for Car Loan Refinancing with the Same Lender

The interest rate will vary based on your credit score and several other factors. Still, borrowers with excellent credit scores often can negotiate a deal that allows them to refinance their car loan with no money down at rates as low as 3 per cent.

If you have fair or average credit, your interest rate could be 4 per cent. Some consumers who have no or poor credit might find it more difficult—or impossible—to refinance their car loan; in these cases, it may make sense to shop around for a car loan from another lender.

FAQs

How to Refinance With a Different Lender?

If you’re wondering if you can refinance your car loan with a different lender, then yes, it is possible.

As long as you make sure they offer a lower interest rate and have a better financial rating.

If so, you can refinance your car loan with another lender without affecting your credit score.

The one exception to this rule is refinancing out of bankruptcy or having other serious credit problems.

In these cases, most lenders will not accept your application for at least six months to two years because they are concerned about whether or not they’ll be able to get paid back on time each month as agreed in their contract with you.

Can I refinance my car loan whenever I want?

There are a few reasons you might want to refinance your car loan.

Perhaps you want to take advantage of a lower interest rate, pay off your loan more quickly, or switch from an adjustable-rate loan to a fixed-rate one. But can you refinance your car loan whenever you want? The short answer is yes, with some caveats.

The longer answer is that sometimes refinancing can be difficult or not worth it, depending on your circumstances and what type of financing you have right now.

Even if you have good credit and low debt, it may be difficult to get approved if, for example, there’s no equity in your vehicle or money in your bank account.

Some lenders also don’t allow refinancing within a certain time frame after getting financing through them.


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