Can I Refinance My Car with the Same Lender?

Whether you want extra cash for a specific goal or are just looking to revamp your budget with inflation and rising costs, lowering your motorcycle payments can help open up some extra cash month to month – but how?Here’s the short answer.The only way to lower the monthly payment on a motorcycle loan is to change your loan terms, either by modifying your loan with your current lender or refinancing your loan. For most people, refinancing will be the better option, because you have more leverage when changing loan providers and can usually get more favorable loan terms that way. The exception would be if you have particularly bad credit or are otherwise not a good candidate for refinance.Read on to learn how motorcycle financing and refinancing works, what makes someone a good candidate for refinance, and the steps to start your refinance and secure a lower motorcycle payment.The Complete Guide to Lowering Your Monthly Motorcycle PaymentIn this guide, we’ll cover:How motorcycle loans workHow refinancing can lower a monthly motorcycle payment What determines motorcycle loan APRs (Annual Percentage Rates) How to make yourself a good refinance candidateThe steps to refinancing a motorcycleHow Motorcycle Loans WorkA motorcycle loan is a secured loan used to help finance a motorcycle. A motorcycle loan works the same way as a car loan. A financial institution (the lender) pays for your motorcycle, and you in turn repay them in monthly installments with an additional fee, interest, for the convenience of borrowing money. Your motorcycle is considered collateral, and if for any reason you cannot repay the lender, your motorcycle will be taken away (and any money you already paid will not be returned). The term “secured” refers to the use of collateral.Motorcycle loans have a principal, which is the price of the motorcycle, plus any taxes and fees, minus any down payment you make. This principal is the base of your loan, and then interest will be applied to that principal. The interest is calculated using a motorcycle loan Annual Percentage Rate, or APR, which is based off of market rates and off of your personal financial situation. How refinancing lowers monthly motorcycle payment In short: Refinancing can lower your payment through securing a lower interest rate, changing the loan term, or both.When you refinance, you are paying one loan off with another loan. The new lender pays off the old loan and you repay the new lender in monthly installments. The new loan will have a different APR and repayment plan, ideally with better terms for your unique financial situation. By securing a lower APR, you can save money every month. You can also accelerate your payment plan, which will allow you to pay your loan off faster and save money (lower APRs are traditionally offered to loans with shorter repayment plans). Or you can refinance a motorcycle loan to a longer repayment period and cut your payments every month.Refinancing your motorcycle is the best way to lower your monthly motorcycle payment and save money on your motorcycle loan. What determines the Annual Percentage Rate (APR) on a motorcycle loanMotorcycle loan APRs are determined based on:Market factorsCredit score and credit historyIncomeLoan termThese factors are important to understand if you want to lower your monthly motorcycle payment.Market FactorsThe economy’s performance will help dictate what APR you are offered. Interest rates are set by the Federal Open Market Committee. If they decide that spending needs to be encouraged, they will lower interest rates. In the past several years, interest rates have varied pretty drastically, so whether or not you can save by securing a lower interest rate may depend on when you took out your motorcycle loan.Credit Score And HistoryThe biggest factor for your motorcycle loan APR (that you can control) is your credit score. Lenders use them to determine how likely you are to pay back a loan. Your credit score looks at the following categories: Payment History. Are your payments consistently full and on time? Amounts Owed. How much money do you owe on your accounts?Credit History Length. How old are your accounts? Credit Mix. Do you have a healthy mix of different types of accounts and debts? New Credit. Do you have a lot of hard inquiries on your credit? Do you have some brand new debts? All of these factors are looked at when determining your credit score (and therefore your motorcycle loan APR). The higher your credit score is, the better motorcycle loan APR you will be offered.IncomeLenders will also look specifically at your income to determine your motorcycle loan APR. Your income compared to the amount of debt you are in will indicate to lenders if you will be able to repay your loans.The Loan TermThe longer the loan term is, the higher the interest rate you are offered will be. Lenders will often offer lower rates for shorter terms. This means that if you select a longer lease period, you are not only paying a higher car loan interest rate, but you are paying it for a longer period of time. You will ultimately end up paying a lot more money overall by selecting a long repayment period.What makes someone a good candidate for refinance The key factors that make you a good candidate for refinance are:You credit score and historyYour incomeYour down payment (original down payment or ability to add more at time of refinance)Your desired loan termYour vehicleThe age/time left on your current loanThe steps to refinancing a motorcycleTo start, getting a preliminary quote to see how much money you could potentially save requires no commitment or hard credit check.Once you’re ready to get serious about refinancing, you’ll want to:Review your creditGather your documentsGet quotes from multiple lendersCompare offersChoose your best offer and start savingReview your credit.Make sure your credit score is looking good. It is so important to have a good credit score when you are refinancing. That is how you can make sure you save the most money. If your credit score isn’t great, wait a few months before refinancing and work on improving your score. Focusing on making on time payments and paying down debt can have a huge impact on your score.Gather your documents.Gather all of your documents, including your original loan documents. You will need a photo ID, your vehicle’s information (may include the bill of sale, VIN number, make, model, and year of your car), proof of income and financial history, proof of residence, and proof of insurance. Scan them and upload them so you are ready to go when the time comes to apply.Get quotes from multiple lendersYou should aim to apply to 3-5 lenders so that you have enough offers to compare in a short period of time, to avoid multiple inquiries on your credit. When you choose to refinance with Auto Approve, we shop around for you and save you the hassle. We have relationships with lenders across the country, which means we can find you the best deals and save you the most money. Compare your offers. You want to look at the motorcycle loan APR, the repayment period, the prepayment penalties, and the customer service ratings when making your decision. When the deals come in, the experts at Auto Approve can help walk you through your options to help you find the best loan for you. Choose your best offer and start savingOnce you decide what loan is right for you, it’s just a matter of signing on the dotted line! We can even help you with all of the paperwork (including the DMV!) That’s it! Refinancing really is so simple when you choose Auto Approve.Now You Know How To Lower Your Monthly Motorcycle PaymentRefinancing your motorcycle is the best way to lower your monthly motorcycle payments. And when you choose Auto Approve for your motorcycle refinance, you’re in good hands. Auto Approve has a 96% would-recommend rating on LendingTree as well as an A+ rating from Better Business Bureau. So don’t wait any longer – get your free quote today!

What is a loan-to-value on a car loan?If you're thinking about refinancing your vehicle, you might come across the term “LTV” or “loan-to-value”. But what does that mean?Let’s start with the short answer.What is a loan-to-value (LTV) ratio in an auto loan?The loan-to-value on a car, often abbreviated to LTV, is the percentage of your car's value that you are borrowing from a new lender, or the percentage of your car’s value that you owe on an existing loan. Here’s a simple example: If your loan is $30,000 and your car is worth $30,000, your LTV is 100%, because 30,000 is 100% of 30,000.The loan-to-value ratio, or LTV, is the monetary value of your loan divided by what’s called the “actual cash value,” or ACV, of your car, so you’ll usually see your loan-to-value listed as a percentage. The higher the percentage goes, the more risk there is for you as an individual and for your lender, so a lower LTV is generally considered better than a high one.Read on to learn more about the ins and outs of your LTV.Everything you need to know about loan-to-value (LTV) on a car loanRead on to learn:How to calculate loan-to-value (LTV)Determining your vehicle’s actual cash value (ACV)Why loan-to-value mattersHow your down payment affects your LTVWhat is considered a good loan-to-value for a car loanWhat is considered an underwater loanHow do you calculate the loan-to-value on a car?To calculate your loan-to-value ratio (LTV), divide the total dollar value of your loan by the actual cash value (ACV) of your vehicle. For example:If you owe $16,000 on a car that is valued at $20,000 by the dealer, your loan-to-value ratio is 80%.16,000 ← owed on loan÷ 20,000 ← car value__________0.80 ← loan-to-value ratioThe tricky part, however, is figuring out your car’s actual cash value in order to do that math. Many insurers use a proprietary formula when calculating a vehicle’s ACV, which makes things a little tougher for the consumer. But, the good news is, you can get a ballpark range fairly easily.What does 80% LTV mean?80% LTV means you owe 80% of the total value of your car to your lender. This is a normal LTV.What does 125% LTV mean?125% LTV means you owe 125% of the total value of your car to your lender – more than the vehicle is worth. This is an example of negative equity or an underwater loan.This can happen when:you don’t make a downpaymentyour car depreciates too fastyou buy a car you can’t affordyou get too many add-onsyou finance a new car by rolling over your old loan into the new loan, carrying a balance from the old loan onto the new oneHow to figure out your vehicle’s actual cash value (ACV)The easiest way to find out your ACV for the purposes of calculating your approximate LTV is to research your car's make and model and look for cars with similar mileage and histories. To do this, you can use the Kelly Blue Book, search for cars like yours for sale online, or even visit a local dealership and ask their thoughts.The basic formula for computing actual cash value is to subtract depreciation from replacement cost, but that is pretty complicated. Your ACV will almost certainly be less than what you paid. For the most part, a car’s value drops significantly the moment someone drives it off the lot and it goes from new to used. But after that initial drop-off, the value depreciates much slower as the vehicle gets used and experiences regular wear and tear.Why does loan-to-value matter?The loan-to-value ratio is one of the most important parts of a new car loan because the loan-to-value on your proposed loan will often determine whether or not a lender will be willing to give you the financing you need, and on what terms.Think about the example of a loan with 100% LTV. Many lenders wouldn’t move forward with this loan because the LTV is too high, making their risk too high. That’s one of the many reasons most people put down a downpayment when buying a new car: lower the LTV makes you eligible for better loan terms and more likely to receive offers from more lenders.And the same is true for refinancing a vehicle. After all, the refinance process is basically applying for a new auto loan with another lender. You’re taking out a brand new car loan for the same vehicle and paying off your existing loan with the new loan. People do this to get a more favorable interest rate or to lower how much they’re paying per month (or both). So when you think about refinancing, you’re really thinking about getting a new loan – which also means that you want a good LTV to appeal to lenders when you want to refinance.How does a down payment affect my auto loan?When you get a loan, the lender will typically request an upfront cash payment called a down payment that’s not part of the financing. The down payment is used to reduce the loan-to-value ratio for your new loan. Some lenders also ask for an additional downpayment when you refinance. Even if the lender doesn’t ask, if you have the financial flexibility, you may want to request to add or increase a downpayment in order to help you save more money and pay less (monthly and in the long run).This is all done because your LTV percent can affect both the interest rate available to you and overall lender options. In fact, some lenders have an LTV ceiling, meaning they won’t lend if the LTV is above a certain percent. Again, the higher the loan-to-value, the more risk the lender has to take on (and you, too!), so it makes sense that a better LTV would give you more and better options for your new loan. For many loans, increasing the amount of your down payment will likely decrease the total cost of borrowing money for that purchase and may save you some cash in monthly payments.What is a good loan-to-value ratio for a car?In general, you want a low LTV. When refinancing a home, you want at least 20% equity in the home, so an 80% LTV or lower. Vehicles are a little trickier, since they depreciate in value over time. While an LTV less than 80% is ideal, it’s not uncommon to have an LTV around 100% on your existing loan when it comes to car loans. When getting a new loan through refinancing, a high LTV won’t necessarily disqualify you, but depending on the lender, you may be asked to put down a down payment to lower your LTV (and we’ll get into why in just a second). All that said, the lower the LTV, the better the interest rate you’re likely to get. So a lower LTV is always better for you as the consumer.What is an underwater or upside down car loan?A loan is called “underwater” or “upside down” when the LTV is higher than 100% – that is, when you owe more than your vehicle is worth.Here are some tips to help you get out of such a situation.And that’s everything you need to know about your car’s loan-to-value.Now you know what a loan-to-value is on a car and why it matters.Understanding how loan-to-value works on an auto loan, whether you’re buying a new car or refinancing your vehicle, is an important part of understanding your eligibility for different loans and the offers available to you.If you’re looking into refinancing, the team here at Auto Approve will work with you one-on-one through every step in the process – whether that means getting prequalified online or finding an offer tailored just for you. Get started today by filling out our simple form to get a quote in minutes.GET A QUOTE

Auto refinance can be confusing when you don’t recognize the terminology. Learn key vehicle refinancing words, terms, phrases, acronyms, and definitions with this in-depth refinance dictionary and demystify the car loan refinance process.Table of ContentsAmortizationAPRCo-borrowerCollateralCo-signerCredit ReportCredit ScoreCurrent BalanceDepreciationDown PaymentFinance RateFICO Credit ScoreGAP InsuranceHard InquiryInterest RateKelley Blue Book ValueLienLoan ModificationLoan TermNon-Sufficient Funds Fee (NSF)Original Loan AmountPayoff AmountPrepayment PenaltyPrincipalProof Of EmploymentProof Of InsuranceProof Of ResidenceRefinanceSecured LoanSoft InquiryUnderwaterUnsecured LoanUpside DownUsury LawHow to use this guideFamiliarize yourself with these terms before you dive into the refinance process. This glossary is organized alphabetically so you can bookmark it and return to it when a word or phrase trips you up as you refinance your vehicle.Essential Auto Loan Refinance Terms & DefinitionsAmortizationHow your loan payments are scheduled and divided up to pay the interest and the principal. An amortization table can show you how your payments will be allocated throughout your repayment period.Annual Percentage Rate (APR)This figure, expressed as a percentage, is your interest rate plus any additional fees you are responsible for. It is important to consider a loan’s Annual Percentage Rate, or APR, as it gives a much more accurate idea of how much you will be spending on your car loan.Co-borrowerA co-borrower is a person who will share joint responsibility of the loan with you. This is different from a co-signer because a co-borrower is always considered jointly responsible for a loan, while a co-signer is only responsible for payment when the primary borrower defaults.CollateralCollateral is an asset that secures a loan. For example, if you were to stop making your car payments and default on the loan, the bank would be able to take your car as payment. The car is the collateral on a car loan.Co-signerA co-signer is a person who agrees to back a loan if the primary borrower defaults on it. They do not share joint responsibility for the loan like a co-borrower does.Credit ReportYour credit report is your personal financial history: it tracks what accounts you have open, your payment history with each account, and the balance you have on each account. These reports are created by the three major credit bureaus: TransUnion, Equifax,and Experian. You should routinely check your credit report to ensure there are no errors. Lenders will request a copy of your credit report to determine if you are a good candidate for a loan.Credit ScoreA credit score is a three digit number that is calculated based on a person’s financial history to indicate your creditworthiness. The numbers range from 300 to 850, and the higher your score is the more creditworthy you are considered. Your credit score is one of the biggest determiners of the car loan interest rate you are offered (the biggest factor that you can control at least).Current BalanceThe amount that you currently owe on your vehicle loan.You can typically find this amount listed on your monthly statement.DepreciationThe loss of value that occurs as an asset ages and wears. Vehicles typically depreciate from the moment they leave the new car lot, with rare exceptions for vintage cars and unusual market conditions.Down PaymentThe down payment is the cash paid up front for a vehicle (or any purchase) when procuring a loan. This amount is not financed. You should aim to put down at least 20% of the car’s total cost. This will help you to stay ahead of the depreciation that occurs.Finance RateFinance rate is another term for APR.Your loan’s finance rate is your interest rate plus any additional fees you are responsible for. FICO Credit ScoreA person’s credit score as calculated by Fair Isaac Corporation (FICO). There are other data analytics companies that will calculate a credit score, but FICO is the most popular and widely used.GAP InsuranceGAP stands for Guaranteed Asset Protection. This is optional coverage that covers the difference between your vehicle’s value (which is what insurance will pay) and the amount that you owe on your car in the event of an accident. Let’s say your car is totalled and your insurance pays you the value of your car, which is $15,000. But you still owe $17,000 on your loan. GAP insurance will cover this difference so you are not paying out of pocket.Hard InquiryA formal request of your credit history from a lender. When a lender considers approving a loan for you, they will request a copy of your credit report to review. This request will actually show up on your credit report and will cause a temporary ding on your credit score. Hard inquiries cannot be made without your permission.Interest RateThe interest rate is the cost of borrowing money, expressed as a percentage of the amount borrowed. The interest rate you are offered will be based on the market rates, your credit score and financial history, your income, and other factors.Kelley Blue Book ValueThe value of a vehicle according to American vehicle valuation and automotive research company Kelley Blue Book.Kelley Blue Book is viewed as a reputable and reliable place to check your car’s value. The value will be based not only on the make, model, and year of your car, but also on the mileage and condition of the car. It’s a good idea to keep an eye on the value of your car throughout the loan period to ensure that depreciation is not outpacing your loan payments (see “Underwater” and “Upside Down”).LienA lien is a lender or creditor’s legal claim to an asset if you fail to repay a debt.When you get a car loan, the lender has a lien on your car, so if you do not pay your debt to them, the car will belong to them.Loan ModificationA change to your loan, as reported to the credit bureaus by your lender.If you refinance your loan with the same lender, they may report it to credit bureaus as a loan modification rather than a new loan. This will not affect your credit score as a new loan would.Loan TermThe loan term is the amount of time you have to pay back your car loan and typically ranges from 24 to 84 months. The loan term is also known as the repayment period. Changing your loan term can lower your monthly payments or the amount you pay in interest.Non-Sufficient Funds Fee (NSF)If one of your payments does not clear or there are not enough funds in your account to cover a payment, you may be charged a Non-Sufficient Funds, or NSF, fee. This type of fee may be charged by your lender, your bank or credit union, or both. On the lender side, the amount should be listed in your contract.Original Loan AmountThe original loan amount is the amount of money originally borrowed from a lender to pay for a vehicle. It is typically the cost of the car plus taxes and fees, minus the down payment made.Payoff AmountThe payoff amount is the amount you will need to pay to get rid of your loan entirely. This is separate from your current balance, which may not reflect the interest and fees that you would be responsible for if you want to pay off your loan entirely/early.Prepayment PenaltyA fee for paying off your car loan early. These penalties may be listed in your original car loan contract. These penalties are designed to offset the losses in profit that occur when you pay off your loan early. Prepayment penalties will at times offset any savings that refinancing can provide, so it’s important to know what these penalties are before you commit to refinancing your car loan.PrincipalPrincipal is another name for the original loan amount. It is the amount of money initially borrowed to purchase a vehicle. When you make your monthly payments, your money is first applied to taxes and fees, then applied to interest that is due, and the remainder goes to paying down your principal.Proof Of EmploymentA statement or document that shows you are employed. This proof may be a paystub, a letter from your employer, or a W2. This shows the lender that you have means to repay your loan.Proof Of InsuranceA statement or document that demonstrates you have coverage and the amount of that coverage. To show that you have insurance coverage, the lender will usually require a copy of your insurance policy that states the amount of coverage. Proof Of ResidenceA statement or document that confirms your place of residence.You will need to show where you actually live as part of the refinancing process. This cannot be a PO box. Lenders want to know where the car will physically be parked in case they need to seize it should you default on your loan.RefinanceA refinance is when you pay off your current loan with a new loan. Your new loan will ideally have a better interest rate and/or better terms. Refinancing your car allows you to add a cosigner or co borrower, change your interest rate, and change your repayment period.Secured LoanA loan that is backed by collateral, such as a car loan. If a person defaults on their loan, the collateral is taken as payment. In the case of a car loan, the car is the collateral.Soft InquiryA soft inquiry is a kind of credit check that allows lenders to review your credit score and part of your credit report without it counting as a hard inquiry. Also known as a soft pull, this is common when getting preapproved for a loan. Soft inquiries do not affect your credit score and your approval is not required for a soft inquiry.UnderwaterA vehicle loan is considered “underwater” when the amount owed on the loan is greater than the worth of the vehicle. For example, if the market value of your car is $15,000 but you owe $17,000 on your car, it is considered underwater. This happens when depreciation outpaces payments. It is common for this to happen if you do not make a down payment (or make too small of a down payment). Unsecured LoanA loan that is not backed by an asset for collateral. These loans tend to have higher interest rates because they are higher risk for the lender.Upside DownUpside down is the same as being underwater, in loan terminology. It is when you owe more on your car than your car is worth.Usury LawThe law that defines the maximum amount of interest a company can charge in your state. Learn These Terms To Make Refinancing Your Car Loan Less ConfusingAnd here’s one more helpful name to remember: Auto Approve.At Auto Approve, we take the mystery out of refinancing, helping you find the refinance that’s right for you and handling the paperwork – even the DMV! Find out just how much money you could save by sharing a few simple details, no commitment required.GET A QUOTE IN 60 SECONDS