If you are planning on refinancing your auto loan to secure a higher interest rate or lower monthly payments, you may be wondering, “Is my car eligible for auto refinancing?”. Read on to find out how you can qualify for auto loan refinancing and what the eligibility criteria are for your car, so you don’t have to face any disappointments.
Is My Car Eligible for Auto Refinancing?
In order for your car to qualify for auto loan refinancing, you need to meet a few requirements. These include requirements for your loan amount and your vehicle, as well as your personal qualifications. The age of your current contract and your credit score may also play a role in determining whether or not you can refinance.
Your lender will look at the following things when deciding to refinance your auto loan:
1. Your Credit Score
In order to qualify for an auto loan refinancing, you need to have a good credit score a minimum of 580 credit score. If your credit score has improved ever since you took out the original loan, you may qualify for auto refinancing.
2. The Age of Your Loan
Another important determining factor in auto refinancing is how long you have had your current loan. If you took out your car loan on bad credit, you would have to wait for 1-2 years before applying for auto refinancing as your lender may not approve your request.
3. Your Vehicle
Lenders also look at your vehicle when determining whether or not to accept your refinancing request. They have mileage and age requirements for the vehicles they consider for auto refinancing. Although these requirements vary from lender to lender, the typical age of your car should be below ten years, and its mileage should be under 100,000. That’s the maximum limit you can get from your lender.
4. The Equity
Another important factor that lenders consider is the equity you have on your auto loan. If you owe more on your auto loan than your vehicle’s worth, then you won’t be able to refinance it until you pay the difference in cash.
In addition to all these factors, you should also be current on your monthly loan payments. Only then is your car eligible for auto loan refinancing. If you meet these requirements and are confident that you can refinance your auto loan, go ahead and contact a lender.