Auto Loan Refinancing FAQs
Many people watch mortgage rates and credit card rates but put their auto loan on auto pilot. Is it time to take another look at your loan?
If you're considering refinancing, a good place to start is to look at what’s changed since you took out your loan:
- Has your credit score or financial situation improved?
- Did you buy your vehicle when rates were higher?
- Do you need more breathing room in your monthly budget?
You may be able to lower your monthly payment amount or get shorter terms when you refinance your auto loan. We look at the pros and cons, and answer some of the most common questions we get about refinancing an auto loan.
How do I know it’s time to refinance my auto loan?
If your credit profile has improved and you can get a lower interest rate, it may make sense to refinance. The decision has pros and cons.
Pros:
- Have a lower monthly payment. A lower interest rate may mean a lower monthly payment. This will depend on how you and your bank structure the loan.
- Improve your monthly cash flow and save you money.
- Decrease the life of your loan. If you get a lower rate and keep the same payment, you could be able to pay off the loan faster.
- Take advantage of the equity in your car. If your car is worth more than its loan, you may be able to refinance it for its full value. The new loan typically pays off your current auto loan and gives you the rest.
- If you refinance your auto loan with Emprise Bank, you will have no payment for 90 days* and there is no prepayment penalty.
Cons:
- There may be fees, closing costs and changes to insurance. Make sure you understand them and know how much they add to your loan.
- You may extend the length of your loan and end up paying more in the long run.
How you decide to proceed depends on your financial situation and goals. It's important to find a lender that will discuss your options and answer your questions thoroughly.
Auto Loan Refinancing FAQs
How does auto loan refinancing work?
The process is pretty simple:
Apply for auto loan refinancing online with our vehicle loan application. You can also visit one of our 30+ bank branches across Kansas and in Kansas City, Missouri.
- Once approved, we'll provide you with our offer. You can review your loan amount, annual percentage rate (APR), and terms and fees.
Before you apply, you'll want to check your credit score and review your credit history. This gives you a chance to look at your credit profile the way a lender will. You can take some simple steps to improve it:
- Make sure your credit history is accurate. You can get a free credit report from AnnualCreditReport.com. Review it for mistakes and reach out to the credit bureau and business to fix them.
- Pay your bills on time. Your payment history can contribute to your credit score, so work to pay on time each month.
- Avoid applying for new debt a few months before your plan to refinance. This keeps hard pulls off your credit record.
Can I save money by refinancing my car loan?
When you refinance, you may be able to save by:
- Reduce your interest rate and lower your payments.
- Improve your cash monthly cash flow. This frees up money you can use for other goals such as building savings, buying or renovating a home, or paying for college.
- Lower the amount of time to pay off your loan.
When can I refinance my car loan?
If your car loan is with another financial institution, you may refinance right away. You may even refinance immediately after buying the vehicle.
If your car loan is through Emprise Bank, there are some restrictions on how soon you can refinance. Talk with a banker to learn more.
The qualifications mentioned above are specifically regarding refinancing the loan with Emprise Bank, not all institutions.
How long does auto loan refinancing take?
We can usually close the loan within three business days if we have all the documents we need.
Does my vehicle’s year or mileage matter?
Yes. At Emprise Bank, if the vehicle still has at least a $5,000 value to it, we may be able to refinance it*. You can get more details about refinancing on our rates page. Emprise Bank will not finance a vehicle older than 2011. the vehicle needs to be in good working order and operational at the time of funding.
If someone is comparing refinance offers, what should they look for?
You want to find a loan that improves your financial position, so look beyond the monthly payment:
- Lay out the total cost of the loan and how long you'll be making payments. Will refinancing help you reach your financial goals?
- Look for competitive rates and low fees.
- Find a bank that’s easy to work with and responds quickly to your questions.
Will refinancing affect my credit score?
You may see a small, temporary dip in your credit score, usually two to five points. It happens when your lender pulls your credit report as part of your loan review.
Can you refinance more than one auto loan?
Yes, you may refinance more than one auto loan. Each vehicle must have a separate loan. You may not refinance multiple vehicles with one loan.
Visit our auto loans page to view our current vehicle loan offers and apply for a loan online.
*All loan offers are subject to credit approval. The actual Annual Percentage Rate (APR) and payment may vary based on the specific terms of the loan selected and credit history. Minimum loan amount of $5,000. Financing the purchase of optional credit life/disability insurance and GAP insurance will increase the payment amount. No payments for 90 days. Debt already financed through Emprise Bank is not eligible for this offer.