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Bottom Line Up Front

  • Refinancing your auto loan can help you save money over time with a lower interest rate.
  • Most lenders consider your current loan, the value of your vehicle, your credit score and any outstanding debt when determining refinancing.

Time to Read

2 minutes

August 15, 2022

Have you given much thought to your auto loan since you signed on the dotted line? Even if the loan was a great fit for you then, it may not be as good as what you could qualify for now. Fortunately, you may be able to adjust your interest rate or monthly payments by refinancing your loan—replacing your old loan with one that better fits your needs.

Learn what lenders look at when considering you for an auto loan refinance and see if you have what it takes to qualify.

The 4 Eligibility Factors for Auto Loan Financing

What is your current loan information?

Lenders need a few basic facts about your existing loan: the current balance, monthly payment amount, time left on the loan and annual percentage rate (APR). Have your loan servicing number on hand so the lender can easily look up your loan.

What is the value of your vehicle?

A lender may not approve you for a refinance unless you meet a certain loan-to-value ratio (LTV). The LTV is the loan amount divided by the appraised value of your car. Check if you’ll meet this requirement by finding the value of your car using online resources.

What is your credit score?

Your credit score can affect the refinance APR you’re offered. Before applying, check your credit score. If your credit score has improved since you first applied for a loan, you can expect your refinance rate to improve in turn. If it hasn’t, try to improve it before refinancing.

Do you have other outstanding debt?

Lenders typically want to know what other debts you have, such as credit cards, student loans or a home loan. This will provide context on how much debt you’re currently juggling and if there’s a chance you could fall behind on your refinance loan.

Apply for a better loan

Don’t get stuck with an auto loan that has a high rate or a payment plan you aren’t comfortable with. At Navy Federal Credit Union, we put members’ needs first. See if you could qualify for an auto loan refinance with a great rate and lower monthly payments. It’s easy to apply on our mobile app,* online, at a branch or by calling us at 1-888-842-6328.


This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.