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How Do I Prequalify for Auto Refinancing?

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Prequalifying for an auto loan is a low-risk way to determine what type of loan you can get. When you prequalify, a lender does a so-called “soft pull” on your credit so that it can give you a rough estimate of the types of rates and terms you might qualify for when getting an auto loan.

To prequalify for an auto loan refinance, you will fill out an application with the lender detailing some basic information about your financial situation. This might include your:

  • Self-reported income
  • Current debt obligations
  • Employment information

You might also be asked to provide your social security number and driver’s license, as well as proof of income and a statement that indicates how much you pay in housing obligations.

If you meet the prequalification standards, you will receive an estimate of your monthly payments, the term, and the interest rate. This usually will happen within 24 hours or so.

It is important to note that “prequalifying” for an auto loan refinance is not the same as being “preapproved” for a loan. When you are preapproved for a loan, the lender takes a much deeper dive into your credit history and looks at other aspects of your financial situation to determine the loan amount you will receive and the interest rate you will be charged.

Preapproval gives you a much more accurate and definite picture of what type of loan you can expect. So, why prequalify at all? The most significant advantage of prequalifying is that it will not hurt your credit score because the lender uses a “soft pull” to get you information. By contrast, a “hard pull” is used in preapproval, which will likely cause your score to dip. In addition, prequalifying is a quick way to get a snapshot of where you stand in terms of landing a new auto loan.

Refinancing an auto loan is certainly no simple task. There are different options available, and the correct choice for your auto loan is not always clear. Gravity Lending provides professional, helpful specialists to help you make the right decision based on your unique situation. Talk to a Gravity Lending specialist today to get started.