For many people, their car loan is one of their biggest monthly expenses. This is largely due to the fact that a vehicle is a major financial purchase. But to make matters worse, many people don’t qualify for competitive interest rates when they take out a loan to purchase their vehicle. If you financed through the dealer, you most likely got a higher interest rate than you could’ve secured through another lender. Unfortunately, other sources of financing aren’t always available if your credit score isn’t good.
By refinancing your car loan, you can break free of a financially crippling monthly expense and infuse some much needed cash into your budget. When you refinance, you’re replacing your existing car loan with a new one. As part of this process, your initial loan is paid off and you will only have to make payments on the new loan.
Refinancing your auto loan can provide several significant benefits:
While there are many ways you can improve your financial situation by refinancing your car loan, it’s important to understand how the process works before you move forward.
Just as when you apply for a mortgage, a home equity line or any other significant line of credit, there are certain steps you must take prior to filling out an application. This prep work is crucial to ensuring you get the best possible deal when you refinance.
The goal of refinancing your car loan is to save money. If you’re unable to save money in the process, it’s not a good idea to refinance.
There are two primary reasons to refinance an auto loan:
Once you figure out if refinancing makes smart financial sense for you, it’s important to evaluate a few additional factors to determine whether you should move forward:
Before you start the refinancing process, you’ll need to gather the following documents to provide to the lender when you fill out your application:
Once you’ve done the legwork, it’s time to start the refinance process. The first step is applying with lenders to find the best rate. iLending leverages relationships with over 50 nationwide lenders to find the best rates for you. If you are going through the refinance process on your own, you won’t have the benefit of these relationships. Instead, you’ll have to reach out to each lender individually to find the best rate.
This can be time consuming and overwhelming. You’ll also end up with vastly fewer options than you would by working with a company such as iLending. As a result, it may be more challenging to secure the best possible terms for your car loan refinance.
You’ll need to fill out the paperwork for each application separately. In addition, with each application you fill out, you’re experiencing a separate hit on your credit report. It’s simply not possible to avoid a hard pull for each credit inquiry when you apply for refinancing yourself. If you apply for enough loans to improve the likelihood of securing the best terms, the sheer number of hard pulls on your credit may have a negative impact on your credit score.
Once you choose a loan option, you have to submit any documentation the lender requires. If you organized these documents during your pre-application legwork, you should have most of this information on hand. However, the documentation requirements are different for every lender and there will be varying levels of difficulty and complexity associated with the process.
In many instances, you’ll be responsible for paying off your old lender after you receive your new loan. You may also be responsible for transferring the title of your vehicle to the new lender, which may require a trip to the DMV. You may also need to follow up with the old lender to make sure all payments were processed properly, and the old loan is down to a zero balance.
At iLending, we’ve deveolped an exclusive You First Approach™ to create a great experience for you. This unique process makes refinancing your car loan easy and hassle free.
Instead of spending hours gathering the documentation you need, you can provide us with your phone number using this form and iLending will be able to pull up all of your vehicle information. We’ll have access to all the documentation information you need, eliminating the lengthy process of digging it all up yourself.
Once you select your car on the iLending form, you’ll see some loan options presented. Click “submit application” on the loan that looks best for you, and you’ll receive a call from one of our personal loan consultants who will discuss your goals for refinancing.
iLending leverages relationships with over 50 nationwide lenders, and we’re able to provide you with multiple options without a hard pull on your credit. Instead, we perform a soft pull which doesn’t negatively impact your credit score. Once you choose the loan option you want, that one lender will make a hard pull on your credit for final approval. This process ensures you only have one hard pull on your credit, which minimizes any negative impact on your score.
Within hours, we’ll have you an approval for a new loan that’s aligned with your goals – lower payments, lower interest rates, or both. We can provide multiple options so that you can choose the best one for your needs.
If you’re ready to move forward, your personal loan consultant will send you electronic loan documents. They’re already prefilled – all you need to do is click on the link to sign the documents via DocuSign.
We’ll need to gather copies of your driver’s license and insurance information to finalize the loan. You can take pictures of these items on your phone and submit them via our custom document gathering portal.
Your personal loan consultant will also make sure your old lender is paid off and the title of your vehicle is transferred to the new lender. We’ll also follow up with the old lender to make sure the entire loan was paid off properly and there are no outstanding balances.
With our You First Approach™, iLending takes care of all the work for you. You’ll have peace of mind that everything is taken care of, and you can just enjoy the added savings from your new loan.
You can read our Savings Stories to find out how iLending has helped many of our clients find financial freedom from a burdensome car loan.
Apply now to get the car loan refinance process started.