How difficult is it to refinance a car loan?

Is it hard to refinance a car loan? My best friend told me she refinanced her loan at a lower rate. It made me wonder if I should refinance mine.

Phoebe Mah · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Refinancing a car loan
is a fairly straightforward process, and it can be a good way to save on your monthly payment or shorten the length of your loan—especially if your credit score has improved since your initial loan. Here’s what you need to do: Think about why you want to refinance: Your goals will help you navigate the different loan terms that are available. For instance, if you’re interested in lowering your monthly payment, consider going with a lender who’s willing to offer you a longer loan term. If you want to save in the long run, you might go with a slightly higher monthly payment so you’ll pay less interest overall. Gather your paperwork: You’ll need documents showing the current balance of your loan, your monthly payments, and your interest rate—you can usually find all of this easily on your lender’s website. You’ll also need proof of your identity and proof of income. Shop for a new lender: Apply for refinancing with several lenders to be sure you’re getting the lowest interest rate available to you. The easiest way to do this is with an online auto refi tool like
—we compare rates from multiple lenders to find a rate that works best for you. Compare rates and terms: Once you receive your offers, determine the best lender for you. Submit your final application, then wait for confirmation that your old loan has been paid off and your new loan has started. That’s it! Important note: Be sure to submit all of your applications within the same 14-day period—if you do that, you’ll only get one hard inquiry on your credit report, even if you apply with multiple lenders. MORE:
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.

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