What paperwork do you need to refinance a vehicle? Here’s the short version.
Driver's license
SSN
Proof of address
Proof of income
Car details
Proof of insurance
Vehicle registration
Current loan information
Read on for a closer look at these items and more on what you need to do to refinance your car and lock in a lower car payment.
In this guide, we’ll take a closer look at what’s required and why, other things you might want to consider looking at or having on hand before refinancing, and how to set yourself up to get the best refi deal available to you.
About Refinancing
Paperwork Breakdown
Before You Refinance
Tips and Tricks for a Better Refinance
The Refinance Process
Before getting started, here are some basics you should know.
Refinancing is when you pay off your old loan with a new loan with new, ideally better, terms.
Refinancing is typically the only way to:
Shorten or lengthen your loan term
Add or remove a co-borrower
Get a more favorable annual percentage rate (APR) when market rates drop, your credit improves, or you got a bad deal in the first place (usually because of dealership financing)
Millions of American drivers are currently eligible for a lower APR than they’re paying, meaning they could be paying hundreds or thousands less on their car loan, and refinancing is the only way to realize those savings.
Here’s a quick overview of how refinancing works.
Get a preliminary quote to check eligibility.
Gather your paperwork.
Send applications to multiple possible lenders to find your best offer.
Choose the refinance that works for you.
Sign the paperwork.
Stop paying your old loan (ensure any last payments are made and that your new lender has paid off the old loan).
Register the change of lien with the DMV (depending on your location, your new lender may handle this, or when you refinance through Auto Approve, we take care of the paperwork filings)
Start paying the new loan (new payments will start 1-3 months after payments on the old loan have stopped)
Let’s take a closer look at the items on your refinance paperwork checklist.
You will need a government issued ID to confirm your identity. Most people use their driver’s license, but you may be able to use your passport, state ID, green card, or military ID.
Before the details of your refinance are confirmed, any lender you apply to will want to run a credit check. While a preliminary quote for eligibility does not include a hard credit check, when you want to actually get hard offers, you’ll need a hard credit check. Make sure all credit checks are done within a two week period to avoid lowering your credit more than necessary.
You’ll need to provide proof of residence (not a P.O. box) to your new lender so they know where you live and can confirm that they offer loans in your state.
Documents that can be used to provide proof of address include:
A utility bill
Your lease, mortgage, or deed (or a recent lease or mortgage statement)
A recent pay stub
A bank statement
A government letter or benefits statement
Proof of income shows lenders that you’ll be able afford the payments on your new loan.
For proof of income, you could provide:
Recent pay stubs
Bank statements
Tax returns or W-2 forms
Income documents for Social Security, pension, or retirement income
A letter from your employer or your employment contract
Self-employed individuals and those with variable income may need to provide multiple documents to confirm income.
You’ll need to share the details of your car for any sort of pre-qualification, pre-approval, or formal application.
That is, you’ll need to know your car’s:
Make
Model
Year
Mileage
VIN (vehicle identification number)
Your lender will almost certainly require you to have car insurance in order to refinance. Depending on the lender, you may be required to have liability coverage plus comprehensive and collision coverage. This is because your vehicle is considered collateral on your loan, so the lender wants to protect their asset.
To provide proof of insurance, you could use:
Your insurance card
Your policy declarations
Any document you have from your insurance that includes your name, vehicle, and coverage dates
You’ll need to share your up-to-date vehicle registration to confirm your car is registered to you. Your registration will also confirm the vehicle details you shared with your lender. If your registration is expired, you’ll need to renew it before refinancing.
Lastly, you’ll need to share details of your existing loan with your new lender so they know how much you owe and the details necessary to pay off your old loan when you refinance.
Since this is an important part of the refinance process, you’ll likely need multiple documents. These may include:
The name of your current lender
Your loan account number
Your current monthly payment amount
Your remaining loan term
And the current payoff amount
Your new lender may also want a copy of a recent loan statement and/or a payoff letter from your current lender (outlining the payoff quote).
Note that the current payoff amount is not the same as the total remaining owed on the loan: the payoff amount may reflect interest and fees. Any amounts owed when paying off the loan early will typically be outlined in your initial agreement.
It’s important to check for any added early payoff fees listed in your current loan agreement before you refinance—you want to make sure the benefits of your refinance outweigh these costs.
That’s all the paperwork you strictly need to refinance your car. Read on for more expert intel on how to get a better rate, or jump right into refinancing with Auto Approve.
Check your credit
Take steps to improve your credit
Get multiple quotes
Read the fine print
Here are four things you should do before refinancing.
Before you even start the process, get a copy of your credit report to ensure its accuracy and check your current credit score. If your credit score has gone down since you initially got financing, you’ll have a harder time getting a better rate.
If you know you want to refinance in the not-too-distant future, get your credit and financial picture in tip-top shape before lenders start looking into you.
This can include:
Reducing your debt-to-income ratio by paying down debt
Requesting a higher credit limit on a card to lower your utilization ratio
Requesting anything inaccurate be removed from your credit report
Maintaining a good track record of paying bills on time
Waiting out any old credit checks—credit checks usually stay on your credit report for 1 year, then stop affecting your score entirely in 2 years, so if you’re close to either of those marks, you may want to wait to apply to refinance
Before you make any decisions on your refinance, be sure to shop around. You should plan to apply to at least 3-5 lenders to make sure you find your best offer. Just make sure all credit checks are done within a two week timeframe—as long as they all happen in the same 14 days, it’ll only count as one credit check.
To make this process easier, you can use a lender network, like Auto Approve’s network of 50+ trusted lenders. When you refinance with Auto Approve, you work with one of our trusted advisors to identify the best lenders for your unique financial picture, then we do the paperwork for you, with no markups on your rate.
Before selecting your refinance and signing on the dotted line, make sure you’ve reviewed not just your new APR (which includes fees as well as your interest rate) but the details of your old loan contract to make sure you know any fees you’ll be on the hook for when paying off the loan early.
Time your refinance based on your loan
Time your refinance based on your credit
Be selective
Work with the experts
The sweet spot for refinancing a loan is when you’ve had the loan for at least 6 months to a year, and still have at least 2 years left on the loan.
That’s because you want your credit to have recovered from the last credit check (and most lenders won’t refinance earlier than that), but you also don’t want to have already paid a ton of interest on the existing loan. The longer you’ve been paying your current loan, the less a refinance can help you save money (though it can still let you add or remove a co-borrower or secure a lower monthly payment in a pinch).
As discussed, the better your credit, the better your rate.
If you’ve just had a hard credit check, or you know you need a credit check in the near future for a major purchase, you may want to hold off on refinancing—either until your credit recovers or to avoid a ding to your credit before something important.
Sometimes drivers think it might be easier to just stick with their dealership financing or refinance with the same lender, but if you do that, you’ll end up paying more than you have to. Take your time and check multiple options to ensure you get your best deal so you can pay less (and keep more money in your pocket for the things that really matter!).
While all these tips can help you lock in a great refinance, the fastest, easiest way to refinance your car and find your best rate is by refinancing with the help of a team of experts.
Refinance with Auto Approve and our trusted advisors will help you gather the right documents, find your best refinance options, and handle the paperwork.
Got your paperwork in order? Then you’re already well on your way to a lower car payment, lower APR, or both!
Get started with a free, no-commitment quote today.
