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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

How do interest rates work on car loans?Here’s the short version of everything you need to know:A car loan is when you borrow money from a bank or other lender to pay for the cost of a car. You then pay that lender back over time based on terms set at the time you get the loan.Interest is the cost of borrowing money from a lender. It’s what you pay to the lender on top of the cost of the car. There are different kinds of interest: simple, accrued, and compound. Most car loans use simple interest.The interest rate on a car loan is the formula used to determine how much you’ll pay your lender above the amount of money paid for the car. Your interest rate will be determined by factors like: your credit score and finances, your vehicle and loan-to-value, and broader market trends.Want to learn more? Keep reading for more in-depth explanations. The Complete Guide to Car Loan Interest Rates In this guide, we’ll cover:Car loan basicsInterest rate basicsInterest rates vs. APRHow car loan interest rates workFactors that affect the interest rate you’re offeredCar Loan BasicsWho needs a car loan?If you’re planning to buy a car, there’s a good chance you’ll need to finance at least part of the purchase. Most people do not buy a car in cash.Financing allows you to borrow some (or all) of the money for a large purchase and pay it back to the lender over a set period of time. Lenders will charge you interest, which is essentially the fee you pay for borrowing money. How do car loans work?Car loans are very simple in principle. When you want a car that you cannot afford to pay for in cash, a bank loans you the money to purchase the car. You get to take the car home and drive it as if it’s your own, but it is technically an asset of the bank. When you finish paying back the money that you owe your lender, plus interest, the bank signs the title over to you and you officially own the car.What is the difference between a car loan and a car refinance?They’re very similar:A car loan is the loan you get when you first purchase a vehicle. A car refinance is when you already have a car loan and decide to get a new loan that replaces the old one. Some people choose to refinance because it is a way to change the terms of a car loan, which are otherwise locked in for the duration of the loan.Considering a car refinance? Learn more about refinancing here.Interest Rate BasicsWhat is interest?Interest is the cost of borrowing money from a lender. There are three different types of interest rates which are all calculated in different ways:Simple interestAccrued interestComplex interestSimple interestSimple interest (also known as regular interest) is based on the outstanding principal and is paid as you go. For example: You borrow $1,000 with a 5% annual interest rate for three years.$1,000 x 0.05 x 3 = $150With simple interest, you would pay $50 per year ($150 total) in interest.Accrued interestAccrued interest accumulates and is unpaid until the end of the payment period.For example: You borrow $1,000 with a three year loan term and a 5% annual interest rate accrued every 30 days.$1,000 x 0.05 x (30 / 365) You would still owe $150 total, $50 per year, but it’d be paid as $4.11 every 30 days. Essentially, this is an accounting difference where you accrue 13.7 cents of interest per day and pay when you get to 30 days of interest accrued.Compound interestCompound interest is paid on the total of the principal and accrued interest. For example: You borrow $1,000 with a three year loan term and a 5% interest rate, compounding annually. That means that you pay interest on the interest, essentially.It’s calculated like this:Principal x ((1 + %interest)years of loan - 1) = total interest due over time$1,000 x ((1 + 0.05)3 - 1)$1,000 x (1.157625 - 1) = $157.27APR vs. Interest RateWhen it comes to car financing, the terms “APR” and “interest rate” are often used interchangeably. But this is not correct and they are not actually the same. The interest rate is the cost of borrowing the money, while the APR (or Annual Percentage Rate) is the interest rate plus any additional loan fees for which you are responsible. These fees, also referred to as “prepaid finance charges,” can vary widely from lender to lender. They typically cover costs associated with underwriting their loans and doing the necessary paperwork. It’s important to review the APR offered to you when looking at a loan, as it’ll give you a better picture of what you’ll actually be paying.How Do Car Loan Interest Rates Work?Car loan interest rates are almost always simple interest rates. A borrower is offered one fixed rate for the duration of their car loan. As the borrower pays down the principal, the amount of interest that they pay decreases until they have paid the loan back entirely. In some cases lenders may use precomputed interest. This means that at the start of your loan they determine how much you will pay in interest and your payments will be divided evenly. If you pay off your loan early, you will still be required to pay the predetermined interest, so you will be unable to save money as you would with a simple interest rate.What Factors Affect The Interest Rate You Will Be Offered?The car loan interest rate that is offered will be based on a number of different factors, including the market rates and the credit worthiness of the applicant. Here are some of the factors that affect the interest rate offered:Your credit scoreYour debt-to-income ratioMarket factorsYour vehicleYour down paymentThe loan termYour Credit ScoreYour credit score is the biggest factor that is within your control when it comes to what interest rate you will be offered. Your credit score is an indicator of how likely you are to make on-time, full payments every month. The better your score is, the better candidate you are for a car loan. The best interest rates will be offered to applicants with strong credit scores.Your Debt-To-Income RatioYour debt-to-income ratio is another huge indicator of how likely you are to repay your loan. If you have a lot of debt compared to how much money you make, you are considered less likely to repay your loan. The Market ConditionsThe credit score you are offered will also be based in part on the prevailing rates at the time. If interest rates are high in general you can expect to be offered a higher rate than at other times.The Vehicle You Are BuyingThe vehicle you are buying will also impact the interest rate you are offered. The most important factor is the age of the car. The older the car is, the higher the interest rate will be.Your Down PaymentThe size of your down payment will also have a large impact on your interest rate. The larger your down payment is, the less likely your loan is to become underwater (meaning you owe more money to your lender than the car is worth). Your loan-to-value makes a big difference for both securing a loan and refinancing.The Loan TermA longer loan term will generally mean a higher interest rate. It will also mean that you will pay more interest over the life of the loan because you will be paying interest for a longer time. Your monthly payments will be lower because they will be stretched out over a longer period of time, but you will (quite literally) pay for this in the long run.How Can I Get The Best Car Loan Interest Rate?To get the best car loan interest rate possible, prepare by doing the following:Work on improving your credit score.Request a copy of your credit report and review for any errors. Pay down debts where you can, focusing especially on loans with high credit utilization ratios.Save additional money so that you can make a more sizable down payment.Get preapproved before heading to the dealership.Apply with several lenders (3-5) so that you can compare the offers.Avoid selecting a long repayment period if you can. Be sure that the car you are purchasing will fit into your budget.Securing a low car loan interest rate will mean big savings in the long run, so it’s important to do your research and prepare as much as possible when buying a car. That’s How Interest Rates Work For Car LoansIf you are planning to buy a new car it is important to understand how car loan interest rates work and how you can get the best rate possible. If you already have a car loan and are unhappy with your current interest rate, get started with Auto Approve today to find out how much car loan refinancing can save you!Get a quote now.

If you’ve looked into your car loan refinancing options, you’ve probably heard about Auto Approve and wondered, is Auto Approve a legit company? The short answer is: Yes! Auto Approve is legit. As of 2025, Auto Approve has: An A+ from the Better Business BureauA 4.7 on TrustPilotA 4.5 on Consumer AffairsPositive reviews from NerdWallet and LendingTreeAuto Approve works with credible lending partners to offer competitive refinance rates with no mark-ups. Auto Approve does not sell, rent, or lease its customer lists to third parties. (For more details, please refer to our FAQ page and privacy policy!)But you probably have more questions, like, is Auto Approve a direct lender? And how does the process actually work? In this guide, you’ll learn all about Auto Approve, how the refinance process works, and how Auto Approve works to get you the best deal possible on your car loan refinance.Everything You Need To Know About Auto ApproveWhat does Auto Approve do?Auto Approve works with a group of top lending partners to find you the best refinance offer to fit your needs. Auto Approve is not a direct lender. When you refinance with Auto Approve, Auto Approve will gather offers for you from our network of lending partners, then an Auto Approve representative will work with you directly to find the right refinance for your unique financial situation. Auto Approve advocates for you as you navigate through the world of refinance, then handles the paperwork for you when you choose the refinance that’s right for you.  What products does Auto Approve offer?Vehicle refinancingAuto lease purchaseGAP insuranceVehicle protection plansRead on to learn more.Vehicle RefinancingRefinancing means paying off your existing vehicle loan with a new one, ideally with more favorable terms. People choose to refinance to:Save money by lowering their interest ratePay less each monthAdd or drop a co-borrowerOtherwise change the terms of their auto loanCar loan refinance is Auto Approve’s primary offering. If you are looking to refinance your loan, Auto Approve can help you to:Determine if the time is right to refinance your loanConnect you with the best lenders for your refinanceHelp you applyFinalize the paperwork (including DMV paperwork)We can help you refinance your car, truck, SUV, and even your motorcycle.Auto Lease PurchaseIf you have a leased car that you want to own, a lease buyout loan is a way to purchase your leased car. You can typically buy your leased car for the price of the residual value of the vehicle, plus any taxes and fees. Unless you have that money in cash, you will need to get an auto lease buyout loan to make the purchase. GAP InsuranceGAP insurance is optional insurance that kicks in when there is a gap between what insurance covers and what you owe on your car.For example, let’s say you still owe $10,000 on your car when you get into an accident. Your car insurance decides that they will only pay out $8,000 in damages. This means that you are still responsible for $2,000 to the lender. GAP insurance would cover this so that you do not have to pay this amount. Vehicle Protection PlansA vehicle protection plan offers additional coverage on your car for maintenance and repairs. Vehicle protection plans can be used with your manufacturer’s limited warranty or they can be used when the limited warranty expires. When you refinance with Auto Approve, you can also bundle a vehicle protection plan into your low monthly payments. Bundling a plan will give you additional protection should something go wrong with your car.Vehicle protection plans from Auto Approve come with added benefits, such as:24/7 roadside assistanceUp to $50 per day rental reimbursementCourtesy towingYour choice of certified-ASE mechanic Is Auto Approve legit?Auto Approve is a legitimate company. Auto Approve was on the Inc. 5000 list of fastest growing private companies in America in 2022, 2023, and 2024.Auto Approve has an A+ rating with the Better Business Bureau, a 96% would-recommend rating on LendingTree, and a 4.7 out of 5 star rating on TrustPilot, where you can read over 12,000 real customer reviews. Auto Approve customers know that we can find them the best deals on car loan refinance and love our customer service. We know that sometimes you need to talk to a real person to get real results, so our live agents are here to work with you and give you the personalized attention you need and deserve.How does a vehicle refinance work with Auto Approve?Here are the steps to refinancing:Determine whether now is a good time for you to refinanceShare basic details with Auto Approve to get a starting estimate and confirm eligibility (soft credit check only)Gather necessary documentsApply through Auto Approve to get offers from our lenders (hard credit check required)Work with your advisor to determine the best refinance for youFinalize the refinance (Auto Approve handles the paperwork!)Step 1. Determine if the time is right to refinance your car loan.The first step to refinancing your car is determining if you should refinance in the first place. It might be a good time to refinance your car loan if any of the following apply to you:Your credit score has improved since you initially financed your car.The market rates have decreased since you initially financed your car.You want to add or remove a cosigner.You need some extra breathing room every month and want to lengthen your repayment plan. Step 2. Contact Auto Approve.If now seems like a good time to refinance your car loan, the next step is to fill out some basics about your vehicle and current loan to get a quote from Auto Approve. From there, our team can help you determine if you will qualify for loan refinancing, and can even get you some preliminary offers in minutes.At this stage, only a soft credit check is required to confirm whether you’ll be eligible to refinance, but a hard credit check will be required to get confirmed offers later in the process. Step 3. Gather your documents.After you chat with an Auto Approve expert, they will help you determine where you should apply. You will need to gather the necessary documents, which will include:Current loan information. You will need the name of your current lender, your account number, and your payoff amount. It’s good to have the contract handy to compare specific terms as well. Personal information. You will need identification, proof of employment, proof of residence, and your contact information.Vehicle information. You will need your car’s VIN, make, model, year, and mileage. Step 4. Apply.Once you have all of your information collected, Auto Approve will help you apply to the lenders that will best suit your needs.  Step 5. Compare and sign.When the offers roll in, you will need to decide which loan is right for you (Auto Approve can help you with this too!). Once you decide which loan is right for you, you can simply sign on the dotted line. Auto Approve will make sure that your old loan is paid off and that your new loan is ready to go. It’s that simple! Auto Approve will even handle the DMV paperwork for you. Auto Approve is legit – and a great partner for your vehicle refinance!Now you know all about Auto Approve and how Auto Approve helps customers find the best refinance for their needs.If you think you’re ready to refinance your vehicle, Auto Approve can help connect you with the lender that’s right for you.GET A QUOTE IN 60 SECONDS

If you are applying for a new car loan, you’re probably wondering what lenders will take into consideration. What do the big banks look for, and how can you be sure that you will be approved for a new car loan? Here’s the short answer.When you apply for a car loan – whether a new loan on a new vehicle or a refinance on an existing loan – the key things lenders will look at are: your current income and income history, your credit score and credit history, your personal information, the vehicle you’re hoping to finance, and either your down payment or your existing loan.Read on to get into the details of how banks determine car loan eligibility (and how you can make sure you qualify).Car Loan Eligibility: Everything you Need to KnowIn this guide, we'll review:How banks determine if you qualify for a car loanWhat’s considered a good credit score for a car loanQualifying for a car refinanceHow do banks determine if you qualify for a car loan?Your incomeYour credit scoreYour personal detailsYour down paymentLenders will look at a lot of information when determining whether or not you are eligible for a new car loan. Your current finances, your credit score, and other factors are all considered when determining eligibility.Your current incomeLenders want to see that you have steady income. Lenders will want to see current pay stubs if you are a W-2 employee (usually they will want to see more than one). If you are self employed or receive social security, you may need to provide bank statements. The lender will tell you what documents you will need to provide. They will also look at how your income compares to your debt (your debt-to-income ratio).Your credit scoreWhen you apply for a car loan lenders will pay special attention to your credit score. Your credit score is an indication of how likely you are to repay your loan, so the higher your score is, they will view you as more likely to repay your car loan. A good credit score will also help you to secure the best car loan APR possible.Your Personal Details: identity and residenceLenders will need to verify that you are who you say you are. They also need to know where you live so that they can repossess the car should you fail to make payments. A government issued ID is usually required for this. If you do not have one, a utility bill or lease agreement may suffice.Your down paymentAre you wondering “how does increasing the size of your down payment impact your auto loan?” The answer is, a lot. Lenders feel more comfortable giving you a car loan if you make a down payment. It will also mean that you have to borrow less money and will in turn get a more favorable car loan APR.What Is A Good credit score for a Car loan?A good credit score means you are a more trustworthy loan candidate in the eyes of the lender. Credit scores can be broken down into five categories: Exceptional (Super prime): 781 to 850Very Good (Prime): 661 to 780Good (Non prime): 601 to 660Fair (Subprime): 501 to 600Poor (Deep subprime): 300 to 500 There is no hard and fast rule for what credit score you need to have to secure a car loan, but generally you will have an easier time getting a car loan if your credit score is above a 620. But don’t just take our word for it. Experian data from the first quarter of 2025 provides data on the car loan APRs offered by credit score (for new cars).Super prime (781-850) average APR offered: 5.18%Prime (661-780) average APR offered: 6.70%Near prime (601-660) average APR offered: 9.83%Subprime (501-600) average APR offered: 13.22%Deep subprime (300-500) average APR offered: 15.81% Additionally it found that 65% of borrowers had a credit score above 661, while only 2% of borrowers had a credit score below 500. So while it is clearly not impossible to finance a car with a poor credit score, it is significantly more difficult and borrowers are offered much higher car loan APRs.How do banks determine if you qualify for a car Refinance?Your existing loanYour vehicleYour financesIf you are looking to refinance your current car loan, you may be wondering what requirements to refinance a car there are. The refinance requirements are similar to those of simply applying for a new car loan, but your current loan and vehicle must also be taken into consideration.Your Current Car loanWhen it comes to car refinancing, lenders want to see that your current loan is at least six months old (although experts recommend waiting a year to refinance to give your credit score time to settle again after your initial financing). This will show that you can make your payments for this loan on time and in full. Some lenders might not require this, but you will need to at least wait until the car’s title is in the possession of your current lender. This can take weeks or even months for the paperwork to get straightened out. Lenders will also consider the time remaining and the balance remaining on your loan. Lenders usually have requirements for how much time is left on your loan (two years is pretty standard). Lenders also typically have requirements for how much of a balance remains on your car loan ($5,000 is another typical amount). If you do not have a lot of money or time remaining on your car loan you may have a difficult time qualifying for a car loan refinance.Your vehicleLenders will also consider the car you are refinancing. If your car is too old or has too many miles on it (more than ten years old and/or more than 100,000 miles) lenders may not approve you for refinancing. Some lenders will refuse to refinance certain makes and models, such as large engine or commercial vehicles. Your vehicle’s history will also be taken into account by lenders. If your car has been in a significant accident or had water damage this might be an issue for refinance.The loan to value on your current vehicle is another piece that lenders will consider when it comes to refinance. Your LTV is the total amount of your loan divided by your vehicle’s actual cash value. If this number is more than 125%, you may have a hard time getting approved for a car loan refinance. Other considerationsIf you want to refinance your vehicle, lenders will consider many of the same factors as they did when you got your initial financing:Your current income and debt-to-income ratioYour credit scoreYour identity and residenceThe down payment you made to purchase the vehicleWhen applying for car loan refinance you should prepare yourself as much as possible by ensuring your credit score is in tip top shape.That’s how banks determine car loan eligibility for both new cars and Car refinancingLenders look at a lot of information when determining whether or not you will qualify for a car loan. It’s a good idea to gather as much information as you can ahead of time and work on your credit score to give yourself the best chance possible of getting approved.If you are considering car loan refinance, Auto Approve is here to help! Our experts can guide you through the process and help find the lender that is right for you.So what are you waiting for? Get your free quote today!GET A QUOTE IN 60 SECONDS

You’ve done your research and you’ve decided that it’s definitely time for you to refinance your vehicle, and you want to make sure you get the best rates on your car refinance. What do you do?Here’s the short answer.To get the best car refinance rates, you’ll need to:Understand APR vs. interest ratesKnow the information lenders will want to look at and prepare your finances accordinglyMake sure your credit is in orderMaintain a good payment recordCompare refinance offers from multiple lendersRead on for the long answer.Everything you need to know to get a good rate on your car refinanceLike so much with refinancing, the more you know the better off you will be. Some diligent research and proactive measures can help you secure the best refinance rates around.In this guide, we’ll cover:Why people choose to refinanceThe difference between interest rates and APRWhat lenders look at when determining ratesProactive steps you can take to get the best car refinance rate possibleReasons to refinance your carThe number one reason to refinance a vehicle is that, thanks to dealership markups, most people can save money by refinancing. However, there are many more specific reasons people choose to refinance.Consider refinancing if:Your credit has gone upMarket rates have gone downYour expenses have gone up and your current rate no longer works for your budgetYou want to shorten or extend the loan term to pay it off on a specific timelineYou want to add or remove a co-borrowerAPR Vs Interest RatesIf you’ve been looking around at car refinancing, you have probably come across the terms APR and interest rate. But what is the difference between APR and interest rate?Interest rate is the cost you pay each year to borrow money, expressed as a percentage. APR, which stands for Annual Percentage Rate, is the interest rate plus any other fees associated with the loan. This includes any loan fees or interest that accumulates before your first payment.Your APR is actually a much better gauge of what a loan will cost, as opposed to an interest rate. All lenders are required by the federal Truth in Lending Act (TILA) to disclose what the APR on a loan or line of credit will be. APR is the number that you want to compare when looking for the best refinancing rates.What Lenders Look At When Determining RatesInterest rates, which combined with additional fees make up the APRs, are determined by both market factors and personal finance factors. Market FactorsRefinance rates depend in part on how the economy is performing. Interest rates are set by the Federal Open Market Committee (FOMC). Lowering interest rates is intended to encourage spending if they decide that spending needs to be encouraged. Personal Finance Factors And The Four C’s Of CreditWhen you apply for credit, lenders will look at what is called the four c’s of credit. These are the considerations they will take when deciding to approve or reject your loan. They will also help dictate what your APR should be. The four c’s of credit are: capacity, character, collateral, and capital. Let’s explore these terms.Capacity. This refers to your ability to repay the loan. What is your income? Is it a steady job that you have had for a while? What are your other debts? These all contribute to your capacity to repay the loanCollateral. This refers to what you have that could repay the loan. In the case of a secured auto loan, your car would serve as collateral.Capital. This refers to how much you are worth (monetarily speaking, don’t take this to heart too much). What are your other assets? Do you have a mortgage, a savings account, or another car? All of this gives a snapshot to lenders and proves that you can manage your finances and have funds, in addition to your income, to pay you debt.Credit. This refers specifically to your credit score and history. We will look at how your credit score is determined in the next section. Your Credit Score And HistoryYour credit score is the most important factor in your refinance rate. While there is no magic credit score to refinance, the higher your score is, the better rate you will secure. To ensure you can secure the best rate possible, look at the following factors:Payment History. Do you have a history of on time payments? Have you missed payments in the past? Lenders want to be sure you will pay back your debt on time. Amounts Owed. How much money do you owe? The amount of money you owe, your debts, are used to calculate your credit utilization score. A credit utilization score below 30% is considered desirable for lenders. Credit History Length. How old are your accounts? Having older accounts and a longer credit history is more favorable to lenders. Credit Mix. Do you have a mix of different types of accounts and debts? A good mix might include a mortgage, auto loan, student loan, and credit cards. This indicates to lenders that you can manage your money across multiple accounts. New Credit. Do you have a lot of hard inquiries on your credit? Do you have some brand new debts? These might be considered liabilities by lenders.Steps You Can Take To Secure The Best Refinancing RatesThe most important things you can do to secure a good auto refinance rate are:Get and maintain good creditShop around and compare for the best ratesBuild And Monitor Your CreditWhether you already have great credit or need to build credit, here are some proactive steps you can take to ensure you have great credit to secure the best available refinance rate:Get your credit report and review for errorsKeep your credit balances below 30%Request higher credit limitsKeep using consumer creditMake your payments on timeBecome an authorized user on another person’s accountUse a secured cardWorth noting: Refinancing can temporarily lower your credit, so if you need a high credit score for another major purchase, you may want to time your refinance accordingly.Get Your Credit Report And Review For ErrorsContact one, or all three, of the credit bureaus (Equifax, Experian, and TransUnion) and get your free credit report. You can get your report from each agency for free once per year. Review your report thoroughly and look at the following:The date you opened any credit accounts or took out any loans. Make sure all dates are accurate.The current balance on each account. Have your records handy to cross reference.Your payment history. Be sure that you have not been reported inaccurately for a late or missed payment.The credit limits and total loan amounts.Any bankruptcies or tax liens.Your identifying information. This includes your name, address, and Social Security number. If you notice any inconsistencies with your report, you can contest the information and report it. Bureaus have 30 days to respond, so it may take some time to get a correct and accurate report. It is important to follow through however as the impact can be drastic.Keep Your Credit Balances Below 30%This is a simple way to lower your credit utilization ratio, which makes up 30% of your credit score. The highest credit scores often use less than 7% of their available credit. This will quickly improve your credit score and as soon as it is reported for the month, you will see the increase on your credit score.Request Higher Credit LimitsContact your credit cards and see if you are eligible for higher limits. This will also help lower your credit utilization ratio, ultimately increasing your credit score. This will help your score very quickly, as soon as it is reported to the credit agencies.Keep Using Consumer CreditWhen trying to increase your credit score, it may be tempting to stop using credit cards altogether to avoid accumulating more debt. It is better for your score to keep using your credit cards to make small purchases that you can pay off. If you can consistently pay off your monthly balances, it will improve your credit and make you a more desirable loan candidate.Make Your Payments On TimeKeep making on time payments to keep your credit score in good standing. Missed payments can quickly ding your score.Become An Authorized User On Another Person’s AccountThis is a quick and easy way to increase your credit score, especially if you do not have a long credit history. If a relative or good friend has an account that is in good standing and has a high credit limit, adding yourself as an authorized user will increase your credit. You don’t even need to use their credit card, you simply benefit from their good credit.Use A Secured CardA secured card is a type of credit card that is backed by cash deposits. This is especially helpful for people who do not have a long credit history but need to establish one. It is used like a normal credit card, and if you consistently make on time payments it will improve your credit score.Shop Around And CompareThe best refinance loans will have competitive APRs and low minimum loan amounts. Looking for a lender with a history of high customer satisfaction rating that is transparent and reliable is also important. You need to make sure you shop around before choosing a refinancing lender to ensure you get the best refinancing rate available to you. Auto Approve can help by helping you gather quotes from a wide range of trusted lenders.Now you know how to get the best available auto refinance ratesOnce you have a healthy credit score, Auto Approve can help you with the next steps of shopping around, applying, and comparing the rates and terms. WHen you refinance with Auto Approve, you get personalized help finding the best fit for your needs, then we do the paperwork for you! And don’t worry, we never tack on additional fees to your rates. Get your free, no-commitment quote today to see how much you could save by refinancing your vehicle!GET A QUOTE IN 60 SECONDS

The short answer: Yes, you can add or remove a cosigner from your vehicle loan by refinancing.Refinancing a car loan is when you replace one car loan with another loan. It is the best and often only way to change the terms of your loan.If your situation has changed and you need a little help with monthly payments, or if you could benefit from your spouse’s excellent credit, for example, refinancing with a cosigner might be a good idea. And on the other hand, if circumstances have changed and you are looking to remove someone from your loan, refinancing your vehicle is a relatively easy way to remove them from the loan – and it has other benefits, if the timing is right for you to get a better deal.Read on to learn more.The long answer: In this guide, we’ll cover everything you need to know about cosigners and refinancing:What is a cosigner?Keeping or adding a cosignerRemoving a cosignerWhat Is A Cosigner?A cosigner is a secondary person who signs onto a loan. They are obligated to pay back the loan should the primary borrower have difficulties making on-time payments. They assume the same financial risk as the borrower. Having a cosigner with good credit can be beneficial in securing a lower APR and getting better auto loan deals.How To Keep Or Add A CosignerYou can easily keep or add a cosigner when you refinance. Your cosigner will simply have to meet the lender’s requirements. Here are the most common requirements to be added as a cosigner:A good (or excellent) credit scoreA good payment historyA qualifying incomeDesire to cosign on your loanA clean background checkRead on to break each of these factors down.A Good (Or Excellent) Credit ScoreGreat credit is the first requirement of cosigning a loan. Think of your cosigner as a safety net; should something happen to you financially, the lender is assured that there is a backup plan for payments being made on-time. A good credit score is an indication of how strong of a security net you have.Credit scores are based on payment history, amounts owed (known as credit utilization), credit history length, credit mix, and new credit. A cosigner is only beneficial if they have good credit. A score of 670 and above is considered good, but the higher their credit score is the more helpful it will be to you.A Good Payment HistoryDoes your cosigner have a good history of on-time payments? Payment histories show lenders how people handle their debts. If you have a history of consistent payments, you are less of a risk to lenders. A Qualifying IncomeDoes your cosigner have a steady income? Their income needs to show that they can pay back the loan on your behalf if you are unable. Desire To CosignDo they want to help you out in this way? Becoming a cosigner comes with a lot of liability. Once they sign on the dotted line, they are responsible for the debt if you should default. A Clean Background CheckLenders will often use background checks to determine the liability of a cosigner. They will specifically look for financial issues, including evictions, repossessions, and financial fraud.How To Remove A CosignerThere are three ways to remove a cosigner from your loan, but refinancing is certainly the most popular:Attempt to remove them without changing your current loanPay off the loanRefinance to remove themYou may want to remove a cosigner if, for example, your credit has improved significantly since your original loan, and you no longer need the help of another person. You may want to reduce the risk for a loved one who was helping you out in a time of need, or you may want to change a loan to reflect a changing relationship. Whatever the reason, when you are ready to remove someone as a cosigner, you have the above options.Let’s take a closer look.Try To Remove Them From Your Existing PolicyRead your contract carefully and closely and see if there are any provisions that will allow the cosigner to be released from responsibility. This is very unlikely, as cosigning is put in place specifically to make it difficult for one person to back out. However, it is worthwhile to look through your contract if you are thinking about it.Pay Off The LoanIf you pay off the loan entirely, you will remove the cosigner automatically. This may not be a practical solution, however, if you are not in the position to do so. Refinance And Remove The CosignerThis is the most popular and easiest way to remove a cosigner. Since refinancing is replacing one loan with another, you are essentially paying off the original loan and starting with a fresh loan with new terms. Before you decide to do this, check on the following:Your Credit Score. Is your score in good or excellent standing? If it is not in good standing, expect to pay higher interest rates if you drop your cosigner.Your Cash Flow. Are you able to make the monthly payments every month? Do not remove your cosigner if things will be very tight. Falling behind on payments will be detrimental to your credit and can result in you losing your car.Your Current Loan. Are there prepayment penalties if you pay off your loan?  If the penalties are high, it may negate any savings from refinancing. Is there enough time remaining on your loan to make refinancing worth it? If you are near the end of your loan term, it is likely not worthwhile to refinance.Your Car’s Condition. Is your car retaining value and eligible to be refinanced? If you owe more on your car than it is worth, you will most likely not be eligible to refinance.Now You Know: Adding, Keeping, Or Removing A Cosigner From An Auto LoanIf you’re looking to add or remove a co-borrower, refinancing your vehicle may be your best or only option. At Auto Approve, we can help you compare quotes from multiple lenders and refinance today.GET A QUOTE IN 60 SECONDS

Wondering, “When should I refinance my car loan?”The short answer is, it depends! It depends on: your eligibility for a refinance, whether you’re a good candidate for a beneficial refinance, and other factors related to your personal finance and broad financial trends.Here are three key things to think about:Can you refinance your loan?Is the time right for you?What do you want to achieve through refinancing?Car refinance eligibility timelineBorrowers are generally able to refinance an auto loan from a few months after the start of the loan until the last 1-2 years of the loan, depending on a variety of factors, but refinancing very early or very late in the loan is less likely to save you money. Refinancing when it’s right for youYou may also want to time your refinance based on your credit score, your finances, broader interest rates trends, or other changes you might want to make to the loan (like adding or dropping a co-borrower).The choice to refinance a car loanThe refinancing process can lower your monthly payments and help you get out of debt faster. But should you refinance your vehicle right now? If you're thinking about it, here are some things to consider:Is your auto loan term nearing its end?Are you struggling with high monthly payments?Have interest rates gone down?Has your credit score gone up?Do you want a lower interest rate?Do you want to add or drop a co-borrower?Ultimately, the right time to refinance a car loan depends primarily on your vehicle, your current loan, your finances, and your credit score, but there are many factors to consider.Dive deeper in the next section to decide if now might be the right time for you to refinance a car loan.Here’s How to Know When to Refinance Your VehicleConsider these five key factors to decide when you should refinance your car loan:Your existing loanYour credit scoreYour cash flowYour eligibilityInterest ratesLet’s break these factors down.Your Existing LoanWhere and when you got your existing loan – and the details of that loan – are all among the deciding factors in whether you’ll be able to find a better deal.It’s worth noting that, if you got your loan through dealership financing, the odds are very good you could save money by refinancing, as dealerships often add mark ups to their rates.When thinking about whether or not to refinance your car loan, it is important to know the current interest rate and term of your loan. You should consider the amount of time left on your loan and any prepayment penalties.Prepayment penaltiesPrepayment penalties are fees your lender charges you for paying off the loan before it is due. Beware: some lenders will not refinance loans that have prepayment penalties attached. That said, even if your current loan has a penalty attached, it may still be worth it for you to refinance. In some cases, you may be able to save more by refinancing than the cost of the penalty. This is especially true if you got a particularly bad rate on your existing loan (which frequently happens when you buy a new car directly from the dealer). Time remainingIf you have had your loan for several months and/or have several years left on your current auto loan, refinancing may be the right decision. After all, refinancing your car loan can be a great way to save money on interest and get lower monthly payments!If you refinance your loan to a longer term, you’ll likely be able to lower your monthly payments – but you could end up paying more in interest. On the flip side, if you can refinance at a lower interest rate and at a similar or even shorter loan term, you’ll be able to save money in the long run. (That’s one of the things that makes refinancing so great!)Your Credit ScoreYour credit history is one of the biggest factors in being able to refinance with most lenders. If you have good enough credit, refinancing your car could save you hundreds or even thousands of dollars.Refinancing can be a great option if you have improved your credit and want: lower monthly payments OR a longer term on your loanBetter credit can also qualify you for a lower rate than you initially received so that you can pay less overall, regardless of whether or not you want to change your other loan terms. If your credit score has gone down, on the other hand, you may not be eligible for a better rate than your current loan.The most important thing to note when it comes to your credit score is that you’ll want to avoid:refinancing right before or after and other major purposes, as each credit pull will temporarily lower your scorerefinancing multiple times, as doing so could hurt your score, and rates usually go up with additional refinances.Your Cash FlowIf your income has gone down or you want more money in your pocket for added expenses, refinancing your auto loan could make sense for you. Doing so can lower your monthly payments and help save some cash, without having to change or get rid of your vehicle.Refinancing offers tons of potential savings and can be helpful for people who have limited cash flow. For example, if you’re unemployed and need money in your pocket right away, refinancing can lower your monthly payments and even give you the option to take a few months off from making a payment.Before refinancing your car loan, make sure you refinance for the best possible price. Shop around and compare offers before signing any paperwork to make sure you’re saving as much as possible. Unlike the competition, at Auto Approve, we never mark up the rate the bank offers you, so we pass maximum savings on to you. Eligibility For A New LoanWhat makes you eligible to refinance your car? This varies based on the lender, but eligibility can depend on: how old your car ishow many miles you have on ithow much money is left on your loanand other factors If you’re not sure whether you’re eligible to refinance, don’t worry – we can help! Talk to one of our knowledgeable and friendly Auto Approve agents or use our handy online quote form to find out if your vehicle loan qualifies and how much you might be able to save in a jiffy.Interest RatesWith all that out of the way, the final important factor you should consider when deciding when you should refinance your car is the broader picture of interest rates.When it comes to interest rates, things have been all over the place in the past several years, with big fluctuations in vehicle prices and rates. Depending on when exactly you financed your vehicle, average rates may be lower or higher now, and your loan-to-value ratio may have shifted. It’s worth reviewing how rates have changed and how your vehicle’s value has changed since your initial loan when you’re thinking about refinancing.With that in mind, if you’re eligible, it may be a great time to refinance your automobile right now – the only way to know for sure is to check.So, When Should You Refinance a Vehicle?When everything aligns! Many things go into making the decision to refinance your loan, but this article should help you know better what to look for. For many people, refinancing can help save money monthly and pay less over the life of the loan.And the good news is, getting a free quote is easy!There’s no commitment or credit check to find out what rates you might be eligible for, and when you decide to refinance, an AutoApprove agent will help make sure you find the best deal for you and then do the paperwork for you, making refinancing quick and easy. So, whether you’re on the fence or ready to dive into refinancing, get your free quote now.

Countless resources are available for those thinking about refinancing a car, but what about motorcycle loans? Does refinancing a motorcycle work the same way as it does with a regular car loan? The short answer is yes, you can refinance your motorcycle loan, and yes, the process is essentially the same.Read on to discover the what, why, and how of refinancing your motorcycle.What is a refinance for a motorcycle?Refinancing means paying off your old motorcycle loan with a new loan, preferably with better terms.Why would you want to refinance your motorcycle?You may want to refinance if…You want to save moneyYou got your loan with a dealership markup and were eligible for a lower rateYour monthly payments are too highYour budget is too tightYour credit score went upInterest rates have gone downYou want to add or remove a co-borrowerYou want to pay off the loan soonerDetermine your whyThere are plenty of things to consider when deciding whether to refinance and which lender is offering the best deal for you. It’s important to ask yourself, why do you want to refinance your motorcycle?You can save money if you refinance to a lower annual percentage rate (APR). You can lower your monthly payment by refinancing for a longer term. If interest rates have dropped, you got a bad deal in the first place, or your credit score has gone up, you may be able to both pay less and save money overall!Figuring out your ‘why’ can help you make a more informed decision. Maybe your monthly payments are feeling too high because inflation has raised your other costs, or your spouse lost their job and you need to prioritize other bills. Or maybe your credit score has improved and you’re now eligible for a more favorable interest rate. For example, if you had a credit score in the 600s before, but it’s now well into the 700s, you could well be eligible for better loan terms.Think about why it is that you want to refinance as you learn more about your options and it’ll help you make sure you choose the right refinance for your unique situation. Whether you are trying to pay off your bike more quickly, or simply lower your monthly payments, you should be able to save money in the short-term, the long run, or both when refinancing your motorcycle loan.A word of warningJust like with refinancing a car, when it comes to refinancing a purchase as expensive as a motorcycle, you want to do your due diligence and make sure you’ve considered and reviewed all possible factors. For example, it may be possible to refinance with less than excellent credit, but it will likely mean paying higher interest rates. In that case, a lower monthly payment now could cost you more in the long run – is that a sacrifice you’re willing to make for more wiggle room in your budget now? Similarly, be sure to check for any fees on your existing loan and go over your options carefully to ensure your refinance meets your goals. Some loans have pre-payment penalties that could cancel out your savings.If all of this sounds confusing, it’s because it can be if you don’t review the information thoroughly. Fortunately, when you refinance with Auto Approve, we’ll work with you directly to review your options, make sure you understand all the terms of your new loan, and handle the paperwork for you – even the DMV!How do you refinance a motorcycle loan?Review your optionsConsider your new paymentReview your credit scoreCheck for feesGather your paperworkLock in your refinanceMany people assume that refinancing anything is a lengthy and complex process. In fact, with proper preparation and help from the professionals at Auto Approve, refinancing doesn’t have to be overwhelming at all! Plus, refinancing your motorcycle loan can save you thousands over time, which makes the process worth it. Here’s what you need to do.Step 1: Review Your Options. Start by comparing current interest rates broadly with the rates when you got your loan. This will help you feel more prepared for the range of options that might be available to you. Then, compare rates from a few different lenders and how they stack up against what you currently pay. Rates will vary by lender, your credit score, and the age and make of your motorcycle. Each lender comes with their own credit score requirements. In general, the higher your credit score, the better the rate you will be able to secure.Using Auto Approve to get a quote will allow you to review several different options at once.Step 2: Consider Your New Payment. Use a refinance calculator or review your quote options to figure out what you could be paying with a refinance and what you’ll pay overall with each option, then make sure those final numbers fit within your ideal budget.Step 3: Review Your Credit Score. When you apply for refinancing, lenders will submit a hard inquiry on your credit. This will temporarily lower your score. It will bounce back within a year, but you’ll want to consider whether you’ve recently had a hard credit check or anticipate having your credit checked for any upcoming major purchases. If you’re about to buy a house, for example, now might not be the best time to refinance.You’ll also want to know in advance (before lenders perform a hard check) where your credit stands, how it stacks up against any credit score requirements from different lenders, and how it has changed since you got your initial loan.  Step 4: Look Out for Fees. Fees are where a lot of loan companies make their money and are written right into the leasing or lending contract. The fees can come from a variety of things related to the application process. Be sure to ask any potential lenders if they charge any fees and thoroughly check the paperwork on your existing loan to find any penalties you might need to pay should you choose to refinance your motorcycle.Step 5: Prepare Your Documents. By organizing the documentation you are going to need ahead of time, you’ll be able to expedite the refinance process. Things you might want to gather include: your vehicle identification numberYour motorcycle’s make and modelthe value of your bikeyour motorcycle insurance informationdetails about your existing loanWhen all of this is gathered, you can complete any application form quickly and submit your paperwork to start saving money.Step 6: Lock in Your Refinance.Once you’ve found a lender and an offer that makes sense for you and double checked that everything is in order, it’s time to refinance! You’ll need your new lender to work with your old lender to get the old loan paid off – or, if you choose to refinance with Auto Approve, your dedicated agent will handle the paperwork for you.Refinancing your motorcycle loan can be a simple way to put more money back in your wallet. Here at Auto Approve, we make refinancing quick and easy. Get your free, no credit check, no commitment quote today.GET A QUOTE IN 60 SECONDS

How do you know when to refinance your SUV? Here’s the short answer.You should consider refinancing your SUV under any of the following circumstances: You are eligible for a better deal because you got a bad deal from your dealershipInterest rates have dropped since you got the loanYour income or credit score has gone upYour budget has tightened and you need to pay less monthlyYou want to add or remove a co-borrowerYou should not refinance if:Your credit score has droppedYou’re about to have your credit checked for something else or recently had a hard credit checkYour loan is less than 6 months or more than 2 years oldYour current loan on your SUV is underwaterYour vehicle is very old or has very high mileageYou’ll owe more in penalties on your current loan than you’ll save with a new loanWork with a refinancing expertAt Auto Approve, we can help you find the best deal for your unique situation, and getting a free quote requires no commitment or hard credit check, so if you’re considering it, get your free quote and our advisors can help you understand your options.Get a quoteHere’s everything you need to know about when to refinance an SUV (and when not to).What is refinancing?Refinancing is the process of taking out a new loan to pay off the balance of your existing loan, ideally with better terms on the new loan than the original loan.What are the top reasons to refinance your SUV?There are a number of good reasons you might want to refinance a vehicle. 1. Lower your monthly payments.Maybe your financial situation has changed and you need a little more money every month. If you want a little more breathing room for your wallet, vehicle refinancing can help lower your monthly payments, either by lowering your interest rate, extending your payment timeline, or both. 2. Pay less overall.Maybe you have a bit of extra money and you want to pay off your SUV at a faster rate and be done with the loan entirely. Maybe you’re eligible for a better rate now. Refinancing can lower your interest rate and/or decrease your payment timeline, saving you money.3. Make a change to the loan.More mundane but equally valid, sometimes people choose to refinance to add or remove a co-borrower, meet a new timeline, or make other smaller changes to the loan terms.How to know if the time is right to refinance your SUVHere are some factors to consider when deciding if now is the best time to refinance a car or SUV:The current terms of your loanYour incomeYour credit scoreYour cash flowAny upcoming large purchases or credit checksInterest rates at largeWhere you got your loanWhen you got your loanWho else is on your loan (or should be)Your vehicle’s age and mileageThe loan-to-value on your current SUV loanExamples of when to refinance your SUV and when not toThere are many things to consider when it comes to refinancing a car. If any of the following apply to you, it might be a good time to refinance your vehicle.1. You didn’t get the best deal on your SUV in the first place due to your income or credit scoreMaybe your credit score had just taken a hit from some inquiries or missed payments. Maybe you had a tough couple months at work and your income wasn’t as high as the bank would have liked. Regardless, the bank didn’t view you as a very desirable candidate, and you were stuck with a rather high interest rate.Since then, your credit has improved. You have checked your credit reports on the three credit bureaus (which you can do for free once a year), and everything looks better. Your job is steadier, and your paychecks are a bit bigger. You know that if you went for that loan now, you would get a much better rate. While there is no magic credit score to refinance, you know that you are a much more desirable candidate this time around.If you originally bought your SUV when times were a bit tougher and your situation has since improved, this could be a great time to consider refinancing.2. You didn’t get the best deal in the first place due to a smooth talking salesmanYou went in to browse and get an idea of what kind of SUV you might be interested in, and before you knew it you were signing on the dotted line. Somehow you agreed to a 7% interest rate when other lenders were offering 5%, and you didn’t even see it coming. Car dealerships notoriously offer higher rates to make more money, and it is common to get caught up in the excitement and agree on the spot.In this case, simply refinancing with an accredited lender can reduce your interest rate, even if your credit score and income have remained the same.3. Interest rates in general have dropped since you first took out the loan on your vehicleBig banks tend to adjust interest rates based on how the economy is performing. It’s worth considering the rates available now versus the average rates when you first got your loan.While your personal finances are most important for determining your loan rate, standard rates fluctuate regularly, and you may be able to get a better deal simply by paying attention to those fluctuations. Timing can make a huge difference when it comes to interest rates and refinancing your vehicle.4. You want to add or remove a borrower to your policyAdding or removing a co-borrower to your loan is a very common reason to refinance, whether the reason is personal or financial.Adding a BorrowerMaybe times are tough right now. Your hours at work got cut and you are struggling to make ends meet. The monthly payments are simply too much to keep up on. Your friend or partner, however, could use a set of wheels, and they have some extra money to help bridge the gap in your payments. Best of all? They have fantastic credit. That's a great reason to consider refinancing your SUV! You can also refinance with a partner who has better credit simply to reduce household bills or help a partner who has worse credit than you by co-signing on their refinanced loan.Whatever your reason, adding your friend or partner to the loan can secure you a better interest rate and reduce your overall payments, since you will be splitting the monthly cost. The lender will consider your joint income and both of your credit scores when determining an interest rate.Removing a BorrowerWhat about removing a co-borrower? Maybe you had a co-borrower on the original loan because your credit wasn’t the best, but you don't really need the help anymore. Or maybe you were in a relationship that has now gone south and you need to separate from that person financially. Either way, refinancing your vehicle is a great way to sever that financial tie.5. You need the extra breathing room each monthYour finances have changed a bit for whatever reason, and you are having trouble making your monthly payments on everything. You want to take a big trip or are saving up for a big purchase. You simply want more spending money to pamper your family. No matter why you want a little extra wiggle room, refinancing could be the solution.Refinancing can allow you to lengthen your repayment period, which will lower your car loan payments every month. Keep in mind that this often means you will be paying back more money overall for the duration of the loan, unless you are able to drastically reduce your interest rate as well.6. It’s been at least six months since you originally took out your SUV loanYou need to wait at least 60 to 90 days to be able to apply for refinancing, as it typically takes this long for the title transfer to complete. But waiting six months will allow your credit score to bounce back from any dips that your credit score may have taken when initially securing your loan. First time borrower? Experts suggest waiting a year to refinance to optimize your refinancing options.7. You have at least two years remaining on your current SUV loanSince most of the interest for a loan is paid in the beginning, the more that is paid off on the loan, the less beneficial refinancing can be. Having at least two years remaining on your loan will help ensure that you will benefit from refinancing your vehicle.When the time is not right to refinance an SUVThere are several reasons that it might not be the best time to refinance your SUV. If any of the following apply to you, consider waiting on refinancing your vehicle.1. Your credit score has decreasedYour credit score is the single most important factor in determining your interest rate. If your score has not increased since your original loan, you will likely not qualify for refinancing. Credit scores can decrease for a number of reasons, such as:Late or missed payments.High credit balances.One of your credit limits decreased.A lot of new credit inquiries.Your credit utilization score has dropped. This ratio is determined by adding up all of your credit card balances and dividing it by your available credit. This number should ideally be 30%Any of these factors can cause your credit score to drop. Request a copy of your credit report and, if you see any inconsistencies, you can report it to the credit bureaus. 2. You need a high credit score for another reasonWhen you apply for refinancing, your credit score will take a hit. There is a fourteen day window allowed by the big three credit bureaus that allows for all credit inquiries in that span to count as one credit hit. But if you need your credit to be in good standing for another reason, say a mortgage application, it is best to hold off. These credit inquiries will affect your credit score for a year, so plan accordingly.3. The fees outweigh the savingsSome lenders build in prepayment penalties to their contracts. To offset the cost of losing your remaining interest, they build in penalty payments. Read your contract closely to see if you will incur any penalties, and call your lender directly if you are still unsure. Sit down and do the math to determine how much you will save by refinancing a vehicle, and see if that outweighs any penalty fees you might incur.4. You have an old vehicle or a vehicle with high mileageIf your SUV has very high mileage or is an older model, it will be difficult to refinance. It might make more sense to consider trading in or buying a new SUV if this is the case. 5. You owe more on your SUV than it is worthWhen you owe more on your SUV than it is worth, it is referred to as being “upside down” or “underwater”. If this is the case, lenders may not see the value in refinancing your SUV loan.Now you can decide the best time to refinance your SUVIf the time seems right, Auto Approve is standing by to help you apply, compare offers, and determine the best refinancing option for you. Auto Approve never marks up the rate you pay, so you know you're getting the best rate available.With an A+ rating from the Better Business Bureau and a 96% would-recommend rating from Lending Tree, you can be confident that we will work hard to save you money.GET A QUOTE IN 60 SECONDS

Here’s the short answer…You should consider refinancing your truck when interest rates are favorable, when your current loan isn’t too new or too old, or when your personal finance situation has changed.Read on for the long answer.When should you refinance a truck? Read on for the long answer.Here’s everything you need to know to decide if now is the right time to refinance your truck.In this guide, we’ll cover:What it means to refinance a loanWhy refinance your truck loanThe major factors you need to consider when deciding when to refinance a truckWhat does it mean to refinance a loan? Refinancing means paying off your existing loan with a new loan – ideally one with better terms. Why refinance my truck? To pay less money overall by getting a lower interest rate or shortening the term of the loanTo pay less monthly by extending their loan or lowering their rateTo add or drop a co-borrower1. Lower InterestThanks to dealership markups, most people are overpaying every month for their truck loan. Refinancing is a straightforward way to fix that.2. Paying LessWith the cost of living going up and up, whether you're trying to make ends meet, looking to save for a big purchase, or simply looking for more disposable income, many of us are looking for ways to save a few dollars.Refinancing your truck may be a quick and easy way to reduce your monthly vehicle payments and give your wallet some much needed breathing room. 3. Changing The Life Of The LoanIf you have more cash in hand, shortening the term of your loan can help you pay less overall, even at the same interest rate. Or, you might want to pay off your loan before a specific date (say, for example, you were retiring and didn’t want to worry about having a vehicle loan after retirement).Lengthening the life of the loan may mean paying more overall (unless you also get a lower interest rate), but can mean paying less monthly, freeing up more money each month in the here and now.What are the factors that determine the best time for refinancing?Your personal finances, including your credit score, income, and future cash flowYour current loan’s terms, including prepayment penalties and time remainingCurrent interest ratesLet’s take a closer look at each of these factors.1. Your Personal FinancesThis includes: your credit scoreyour incomeyour cash flow Trying to determine when is a good time to refinance a car loan or truck loan is going to vary from individual to individual. Your personal finances will be a huge factor as to when you should consider refinancing. a. Your Credit ScoreYou might be wondering, “what credit score do I need to refinance my car or truck?” The truth is there is no one magic number that will make refinancing make sense. Instead, look at how your credit score has changed since you last financed your truck. If your credit score has increased, even only slightly, you may qualify for a lower interest rate. This leads to more savings every month and more money in your pocket. If your credit score has gone down, this might not be the best time to consider a vehicle refinance.A good credit score is one of the most important factors in securing a good interest rate, so keep a close eye on your score to determine the best time to refinance.b. Your IncomeIf your income has decreased recently, refinancing can help reduce your monthly bills and help bridge the gap between earnings and expenses.If your income has increased, you may want to pay more monthly on a shorter loan to pay less interest.c. Your Cash FlowAs well as changes to your income, you might have changes to your expenses.For example:If your family is expanding If someone you love is sickIf you want to remodel your bathroomIf you want to pay off credit card debtIf you’re saving up for a special occasionIf, for any reason, you’re spending or saving more and could use some extra cash, refinancing your truck could be the answer to your cash flow challenges. You could pay less monthly with a refinance.You may also be eligible to refinance and borrow additional money based on your truck’s value. It is important to be careful here, however; a truck is a constantly depreciating asset, so you do not want to risk owing more money on your truck than it is worth. 2. Your Current Loan’s TermsIn addition to your personal finances, it is important to look at the current terms of your auto loan to determine whether or not it is the right time to refinance your vehicle. Consider:The time remaining on your loanAny prepayment penalties or fees built into your current loanThe amount of time you have left in your repayment period will affect whether or not refinancing is worthwhile. In addition, some lenders charge fees should you choose to pay back your loan early. It is important to check these terms and weigh your options.Here’s a more in-depth explanation.a. Time RemainingThis is the time left on your current loan’s pay period. If refinancing to a lower interest rate results in a similar or shorter payment period with a lower rate, you will certainly reduce your payments and save money overall. But if refinancing your truck lengthens your payment period, it may lead to lower monthly payments, but the additional payment period means you may be paying more money overall. This decrease in monthly payments may still make sense though, depending on your financial situation. It is important to look at all of your options and do the math to decide whether or not it is a good time to refinance your truck. On the fence? The experts at Auto Approve can help you compare options from different lenders to make sure you get the best truck refinance for your unique situation.b. Prepayment PenaltiesSome lenders charge a penalty for paying off early, making it more of a burden to refinance. Prepayment penalties help companies to offset the lost profits that come as a result of paying off loans early. To find out if your loan has a prepayment penalty, you can: look through your contract contact the lender directly to find outIf you find out there is a penalty associated with paying off your loan early, be sure to sit down and do the math. If the penalties of refinancing your truck are outweighed by the savings, it still might make sense to refinance.While there can be exit and transfer fees associated with refinancing, rest assured that, at Auto Approve, we never markup the price that you pay.3. Current Interest RatesInterest rates tend to fluctuate, and have been up and down over the past several years. The best thing to do is to compare the rate of your current loan with the available rates at the time you’re considering refinancing. If all other factors are equal, keep an eye on interest rates to try to time your refinance just right. But if your personal situation has changed, unless you got a really low rate on your initial financing, it may be worth checking your options whenever you feel a refinance is right for you.Getting a free quote from Auto Approve requires no hard credit check and no commitment, so there’s no time like the present to see how much you could save.Now you know how to find the best time to refinance your truckShould you refinance your car or truck? Is refinancing a vehicle worth it? As you can see, there are many factors that must be taken into account. Ultimately, you want to get: the shortest loan term you can afford ANDthe lowest interest rate available to youto guarantee you are getting the best truck loan possible. At Auto Approve, we advocate to get you the best rates and best deals from leading lenders. If you're ready to refinance your truck, we can help.GET A QUOTE IN 60 SECONDS