Refinancing an auto loan is generally possible if you meet the basic criteria. The goal is to take out a new loan to pay off an older loan. While this may sound simple, there are some timelines and possible conditions you must consider.
Lenders certainly prefer that you stick with them for the entirety of your loan. They often put terms and conditions in place to try to keep you on the same plan. However, you can usually pay a fine to break the loan if there are conditions such as these. Some lenders also only have these clauses for a certain period, after which you can refinance with no penalty. While it is important to read all the terms and conditions prior to taking out a loan, Gravity Lending does not offer loans with early payment penalties.
The Refinancing Timeline
There are other timelines to consider based on your car title and ownership rights. After purchasing a vehicle, you must wait to refinance until the title has been transferred into your name. However, you may be able to pre-qualify for a new loan while it is being transferred.
If your primary goal is to get lower interest rates due to poor credit, waiting at least six months is key. This gives you enough time to build your credit back before applying for a new loan. New lenders need to see that you have a history of making payments on time.
You should also consider how much time you have left on the loan, as well as the rate difference. Refinancing is also not the best option if you’ve already paid off most of the loan and your car has aged. Gravity Lending requires a minimum loan balance of $10k to refinance.
Other Aspects to Consider
While previous terms and the timeline are essential, other factors must be considered. Maybe you got a bad loan, took a rebate, or are struggling to pay monthly. These are all valid reasons to consider a new lender and undergo the refinancing process.
Explore Your Options with Gravity Lending
Gravity Lending can help you figure out your goals and your refinancing options. We make the auto refinance process simple and secure. We also offer a nationwide lender network, so we can customize a solution to fit your financial needs. Contact us today to get started.