How long does it take to refinance a car loan?
Quick insights
- Auto refinancing typically takes 1 to 2 weeks but could take longer.
- The length of the process depends on several factors, mainly the lender and its refinancing process.
- Refinancing a car loan may be a quicker process when you prepare ahead of time and respond promptly throughout the lender’s application review.
Refinancing your car involves replacing your current auto loan with a new one, usually with better terms, such as a lower interest rate. The process may not take as long as some road trips but could save you money for your next one. In this article, we’ll cover how long the refinancing process usually takes and factors that affect the timeline.
How long does auto refinancing take?
The entire process of refinancing a car loan could take 1 to 2 weeks. The application itself might seem straightforward and take a few hours, but getting to an approval and beyond takes up most of the timeline. For example, the process could be delayed if there are any issues supplying or verifying information.
Factors could that affect the timeline of auto refinancing
Several factors may influence how long auto refinancing takes, including:
- The lender’s processing speed
- How quickly you submit required documents
- Your credit score
- The time it takes to transfer your car’s title
Some lenders can process refinancing applications faster than others. Quickly providing necessary documents and information can help shorten the process.
Can you do anything to make car refinancing faster?
To try and expedite the refinancing process, here are some tips:
Gather your documents
You’ll probably need your driver’s license, proof of income (such as pay stubs or tax returns), proof of residence (like a utility bill), insurance information and details about your current loan and vehicle. Having the latest versions of these documents in order when you apply could speed up the application process.
Research lenders
Not all lenders have the same processing times. If speed is a priority, research lenders who advertise quick refinancing processes, then compare their terms.
Apply online
Applying online and working with the lender electronically whenever possible can speed up the total refinancing process.
Be responsive
During the refinancing process, the lender may need additional information or clarification. Responding promptly to these requests can help speed up the lender’s verifications and application review.
Ask about direct payoff
After receiving an approval, ask if the new lender can handle the direct payoff to your current lender. This might save time compared to managing the payoff yourself.
When is the best time to refinance your car?
The best time to refinance may be when available interest rates drop or your credit score improves. The remaining balance on your loan and the age of the vehicle are also worthy consideration when picking your moment to refinance. Finally, it may be worth checking with your lender before refinancing. Some lenders charge prepayment penalties.
In summary
From start to finish, refinancing a car loan could take as little as a few days up to several weeks. The duration can vary mostly based on how quickly you can provide necessary documents and how efficient the lender’s review process is.
Preparation, choice of lender and your responsiveness through the process are all factors that can affect the timeline. If there are no speedbumps, you could be cruising toward savings in no time.
