with the same bank that you have your loan. But refinancing with the same institution isn’t always the right decision and shopping around will ensure you’re getting the best rate.

Refinancing a car is a great way to manage long and short-term financial goals, but many Americans pay auto loans that are far too costly. When you’re ready to refinance your car, it’s always a good idea to explore what options you have—both in renegotiating and exploring other car loan possibilities.

If you’ve got questions about refinancing, the

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Can you refinance a car with the same bank?

Most lenders will allow you to refinance your vehicle. Refinancing with your original institution will usually be the same interest rates and monthly payments you’re used to—but not all lenders follow the same practice.

When gearing up to refinance your vehicle, you should ask yourself the following questions about your current lender:

Are the methods of payment easy for you?

Are the monthly payments reasonable?

How about the interest?

If your answer is no to any of these questions, it might be time to start packing up and hitting the road—in the non-literal, banking way.

MORE: US Bank refinance review

When should I refinance?

There are a few main reasons why you might choose to refinance—but when preparing to take out a new loan, it’s best to assess your current situation.

MORE: How to refinance a car

You qualify for a lower interest rate

If you’ve seen a bump in well-to-do financial status, you could qualify for a lower interest rate with the same lender or a new one. This means that you’ll end up paying less on your loan over the term.

Here are a few common ways to qualify for lower interest:

Improve your credit score

Improve your financial situation

Get a cosigner for your loan

MORE: How to get a cosigner for a bad credit car loan

You’re having trouble making a payment

If you’re having trouble making a payment, then now might be a good time to see what other options are out there.

The world of auto loans is competitive, with loads of lenders on the hunt for your business. There could be more competitive monthly rates waiting for you and a vehicle with another lender—so it can’t hurt to consider refinancing.

The same refinancing benefits apply if you’re not having trouble making a payment but just want to lower your monthly costs.

MORE:

How to reduce car payments without refinancing your car loan

Your car has reached its age or mile limit

Many loans possess a limit for the age or mileage of your car. When you reach it, you’ll need to refinance the loan.

It can be difficult to negotiate competitive rates with the same lender when it comes to older vehicles. Especially for this type of refinancing, we recommend you do a little shopping around before committing to a new loan.

Using the right tools, you might be surprised by what deals are lingering just around the corner.

Key Takeaway There are a lot of reasons for refinancing a car. Getting specific about the why of refinancing your vehicle can help narrow down what you’re looking for in a new lender.

MORE:

When is the best time to refinance a car?

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Is it easier to refinance with my current bank?

Not quite. While your original lender may seem like the easiest place to apply for a new loan, you are never locked into using just one lender. On top of this, it’s in a competing lender's best interest to make the transitioning process as smooth as possible—paving the road between you and your new loan.

Shopping around is the best way to make sure you're getting a great deal.

How to refinance with the same bank

When refinancing with the same lender, you’ll need to gather the correct documents, contact your lender, and request to refinance. Here are the documents you’ll usually need—though, this depends on the lender:

Proof of income

Updated personal information (address and monthly housing spending)

Your vehicle registration

Your lender will also look over details about your current vehicle loan and credit score. They will put together an offer with an interest rate, fee, and length based on the information you provided.

MORE: How to refinance a car loan in six easy steps

How to refinance with a different bank

Refinancing with a new lender follows much the same process as refinancing with the same lender—but you usually need to provide additional paperwork. Here is the information you’ll probably need:

Income verification

Information about your current loan and lender

Previous lender's contact information

Your vehicle's make, model, and year

Your vehicle's mileage and

VIN

Proof of insurance

New lenders will also conduct a credit check when you request to refinance. Note that multiple credit score checks may result in a significant dip in your score—this is only temporary and will usually bounce back within a few weeks.

MORE:

Pros and cons of refinancing a car

The benefits of refinancing a car loan

There can be a lot of benefits to refining a car loan. Here are the most common:

Extend the length of your loan

Lower monthly payments

Reduce the APR (the amount of interest you will pay)

Acquire more convenient paying options

When on the road, it’s important to be active and alert—and the same is true when looking for a new loan. Comparison shopping between lenders is the only way to ensure you’re getting the best deal when it comes to refinancing.

MORE:

Loan modification vs. refinance: which is the better option?

How to find a good deal on car insurance

Comparison shopping isn’t just beneficial for finding a new lender, though. If you’re looking for more competitive rates on

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FAQs

Can I refinance with the same lender?

Yes—but it may not be the best option for you. If you refinance with the same lender, you’re probably missing out on substantial deals that other banks will offer you.

To ensure you’re getting the best loan possible, comparing lenders is essential.

Will shopping between multiple lenders impact my credit score?

Shopping between multiple lenders means that you’ll have a lot of different eyes on your credit score. When multiple lenders check your credit, you may experience a dip in credit score—but credit agencies understand that you’ll want to shop between different lenders before making a decision, so this dip is only temporary.

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