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UPDATED MAY 19, 2022

Auto refinancing steps

Refinance process steps and application details



14 min read

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About the refinance process

Thinking about refinancing your car loan can seem like a lot of work. Let’s cover the basics of what is needed to refinance your car and how you can set yourself up for success in the refinance process. Truth be told, it’s not as hard as it seems! Learn how to get started, the documents you need during the process, and how to apply to lenders.

Black SUV driving on a mountain road

Understanding auto refinancing

First, you have to understand what refinancing does. Refinancing is a good way to change the details surrounding your auto loan like your monthly payment amount, interest rate/APR, or even products like GAP. It lets you replace your current auto loan with a new auto loan. You can set up your new auto loan to have more favorable monthly payments, interest rates, or even term lengths.

Addressing dealership doubts

If you think back to when you got your auto loan, you probably spent hours at the dealership talking to the finance manager, reviewed all of the car loan details, and signed the lending paperwork. Now, you have started making payments to your lender and may be wondering, “Did I get the best deal when I bought my car?”

If you think you did, awesome! Keep paying down the loan and enjoying your new car! If you have doubts, there are ways you can refinance to change the terms and interest rates of your loan to potentially get a better deal.

What refinancing does

Great, so we know we can change our auto loans with refinancing, but how exactly does it work? Refinancing lets you adjust the loan’s term and interest rate by submitting your personal information, vehicle details, and current loan information to lenders. These lenders review the information and provide new loan terms and rates based on a number of factors like your credit score, location, and vehicle details.

When you select a new auto loan, the lender pays off the old loan amount and takes over your debt. All new payments you make in the future are sent to the new lender. Understanding if refinancing is right for your situation often depends on how much money you can save.

Learn about auto refinancing basics

Calculating refinance savings

You can refinance your vehicle with several goals in mind. One of the most common goals is to save money by extending your loan term and decreasing your monthly payments. Meeting this goal means more money in your pocket at the end of each month.

Calculate refinance savings

Use the refinance loan savings calculator to see how much you can save.

Saving money each month is a great goal to work towards. You can use our auto refinance calculator to see how much money you can save monthly and annually. Then you can start the refinance process to try to find similar interest rates.

To get started with the calculator, you need to know the value, term, and interest rate of your current loan. Enter these numbers into the calculator to compare them against new loan numbers to see the estimated savings.

Caribou makes refinancing easy

We simplify the process and allow you to see your savings quickly while helping you along every step of the way.

Organizing your vehicle and personal documents

You will need to submit several types of documents to lenders during the refinance process. Having these ready helps you have a lot of the required information on hand. They include things like your vehicle details and mileage as well as personal information like your street address and income. Many times for refinancing pre-qualification, your SSN is not needed.

Vehicle information documents

To complete the refinance process, lenders need to know about your vehicle type, make, model, year, mileage, and other information like features, customizations, or modifications. Having these documents related to your vehicle ready will help you easily reference your vehicle information and provide it to loan officers and lenders.

  • Vehicle registration card: Your vehicle’s registration card contains a lot of important information like license plate number, vehicle identification number (VIN), make, type, and year your vehicle was made. Having this document ready will allow you to quickly reference any details lenders need.

  • Vehicle insurance card: Your insurance card is similar to your registration and has similar information about your vehicle’s make, model, type, year, and VIN. This is a great alternative to have ready during the refinance process if you cannot easily access your registration. Tip: You can usually find this insurance information through your insurance company’s smartphone app or online portal.

  • Vehicle mileage: Verify your vehicle’s mileage. Here at Caribou, you can do this by taking a picture of the odometer with your smartphone. Lenders typically have a mileage requirement when you refinance your car. They need to verify the vehicle’s mileage to ensure it is worth refinancing and will continue to be roadworthy. For example, most lenders have a mileage requirement of under 120,000 to 150,000 miles.

Personal information documents

Once lenders know about the vehicle, they need to know about you next. This includes your name, birthday, where you live, annual income, and other information.

  • Driver’s license: Lenders have to know who you are. Providing your driver’s license or government-issued ID is an easy way to give them your personal information like name, age, and address. Make sure your license is valid and updated with your current information. If you have moved recently or changed your address, you can usually add your new address on the back of the license in the appropriate address change area.

  • Annual income: Lenders need to verify how much money you make each year. This allows them to measure your ability to pay off your auto loan and for refinancing your current loan. To prove how much you make, have your most recent paystubs ready for reference. If you are self-employed, you may also need to provide bank statements, tax return information, and other documents showing proof of assets.

  • Co-borrower information: If you are using a co-borrower during the refinance process, make sure you have their information as well. Using a co-borrower places them on the loan so they can help you qualify or get a better interest rate. You need to have the same personal information about them including their name, address, income, and contact information.

Learn how to send documents to Caribou

Start the Refinance Process

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Researching auto lenders

Researching lenders is the next step in the refinance process. You want to make sure you are getting the best deal when refinancing your loan. There are several types of financial institutions that provide refinancing, including banks and credit unions. Other online lending resources like lending marketplaces can help qualified individuals find the best deals.

Lending institutions

When you refinance your car loan, the lending institution provides the funds for your loan with you as the borrower. They become your new creditor and you send your monthly payments to them. The two main types of lending institutions are credit unions and banks. Both provide similar auto lending services, but there are a few differences between them.

Auto loans from credit unions

Credit unions are commonly used for local banking services like savings and checking accounts as well as auto loans and mortgages. They are deemed “not for profit” financial institutions. The term “credit union” describes just that - a union of members who share in ownership by opening accounts and depositing funds with the institution.

Applying for auto loan refinancing through a credit union can be a good idea for easy access to refinancing resources and lower interest rates. It may help if you are a member there beforehand but is not mandatory.

Keep in mind it is good to check around for competitive refinancing rates from other institutions for comparison to make sure you get the best refinancing deal.

Auto loans from banks

Banks are what most people normally think of when it comes to financial institutions. At a bank, anyone can be a customer and cash checks, exchange or “break” larger bills, or use things like coin counting services. Most anyone can open a bank account as well. Banks are “for profit” financial institutions meaning any profits earned are distributed to the shareholders.

Applying for an auto loan at a bank is usually a pretty straightforward process, and you do not need to have a previous account with the bank to apply. However, banks can have higher interest rates than credit unions as well as a minimum loan refinance amount. For example, some banks only provide refinancing for car loans with values above $7,000.

Doing ok so far?

We are happy to help answer any questions you have about refinancing. Don't get stuck trying to compare all of the refinancing options with banks and credit unions. Our application process helps you narrow down the possibilities with qualified offers.

Analyzing lenders

By now you might be overwhelmed! With so many options, it is easy to feel like there are too many options for refinancing your car. How can you possibly research, analyze, and apply to all of the banks and credit unions out there to find the best deal?

You could always settle for your family credit union that your grandpa swore by and used since “way back in the day”, but is that truly the best deal? Luckily, there is a solution to help you quickly and confidently navigate through all of the auto refinance options. Enter lending marketplaces.

Lending marketplaces

Lending marketplaces are online platforms that help you compare top lenders and find a suitable lender for your unique situation. These platforms usually provide a list of financial institutions like credit unions and banks along with their terms and best interest rates. Keep in mind, you may not qualify for the headline rate, but it is a good starting point for reference.

Some marketplaces even help you pre-qualify for refinancing directly on the platform in addition to showcasing the best lender rates and connect with the Department of Motor Vehicles (DMV) to input your vehicle information by license plate number. These lending marketplaces offer a curated “done for you” experience and save you a trip to the DMV. They help you navigate the refinance process and choose a lender quickly and easily.


Here at Caribou, we take pride in making it easy to understand the refinancing process and connect you with the right lender. Everyone’s financial situation and goals for refinancing are different. We help you reach your goals, save you money, and make the best choices when finding a lender.

Applying to lenders for auto refinancing

Applying for auto refinancing is the next major step in the process. You have probably thought about refinancing for a while and understand how refinancing can help you. By now, you have calculated your estimated monthly and yearly savings dollar amounts, collected all necessary documents, and researched top lenders.

Start your refinance applications by submitting your applications to each individual lender or by applying through a refinancing marketplace using their online application portal. If you are applying to individual financial institutions one by one, you will need to apply individually to those respective credit unions or banks. If you choose to use a marketplace, you can usually pre-qualify across multiple lenders at the same time once you enter your personal and vehicle information.

About applying with Caribou

Here at Caribou, our refinancing marketplace, you can easily see available loan options. Once you enter your personal and vehicle information, you can pre-qualify across multiple lenders at the same time. Our processes can help you see offers quickly and easily. Think of using Caribou like an auto loan research shortcut.

To apply with Caribou, start by applying through the online application portal.

  • Enter your personal information by referencing the personal documents you collected. Provide lenders with your personal details, address, and income along with your co-borrower information (if you are using one).

  • Enter your vehicle information, mileage, and additional options or modifications. Note: Make sure your mileage is entered correctly. You will usually have to send your odometer picture featuring your mileage to the loan officer later for verification.

  • Enter your old loan information including the loan’s total value, balance, term, interest rate, and monthly payment. You may be able to simply import and confirm this information by using our marketplace integration to securely access your credit history.

  • Select the refinance loan option presented by your chosen lender. The new loan should list the amount financed, new term in months, APR/interest rate, and new monthly payment. If you are selecting a flexible term loan option, you can usually see the different rates based on the terms like 36, 48, or 60 months.

Add-on products and coverages

As part of the refinance process, you can also add additional products and coverages to your auto loan which can help take care of and protect your vehicle. This includes things like key replacement coverage, extended vehicle protection, and cosmetic care packages.

Car key replacement coverage

A key replacement program can be a good option for when you lose or misplace your keys. Cars that have keyless entry systems use a combination of electronic keys, transmitters, and key fobs to access the vehicle. The loss of one of these high-tech fobs can cost hundreds of dollars to replace. Key replacement coverage can help you replace a lost key fob.

Extended vehicle protection

Extended vehicle protection plans can be a good option to consider if you currently do not have a factory warranty on your vehicle. Unexpected car repairs can cost thousands of dollars and leave a big “dent” in your bank account or leave you with a big credit card bill to pay off. Extended protection can help cover the cost of repairs.

Adding extended protection to your refinanced loan gives you added protection and combines the cost into your monthly car payment. When selected, your extended vehicle protection usually lasts for a set term or mileage amounts like 48 months or 60,000 miles.

Cosmetic care packages

Cosmetic care packages can help keep your vehicle looking fresh and new. Consider this add-on if you want to protect your car’s image and up-keep the value of your vehicle. These packages can help cover things like dents and dings, tire and wheel protection, windshield damage (like cracks and chips), and other things like emergency roadside assistance.

Finalizing your credit application

Lock in your rate once you have found the best refinance option. This step in the refinance process includes working with the lender to finalize and submit your credit application. You should have a verified loan offering at this time and know all of the new loan information including the following.

Selected loan details:

  • Total amount financed

  • Interest rate of the refinanced loan

  • Term of the selected loan option

  • New monthly payment amount

Loan application approval

The lender must approve your loan application once you submit everything on your end. The lender decision may take a little while (up to a few days potentially) depending on their application queues, capacities, and wait times.

Making payments on your new loan

The last step in the auto refinancing process is to begin making payments to the lender once everything is transferred over for your new loan. They will send you a “welcome packet” once the transfer process is complete. This packet is usually sent digitally by email or by standard mail (sometimes both) and includes your new loan documentation.

Check the documents for your new contract, account details, and payment options. Make your new loan payments using this information. Remember, these payments will go to your new lender since they took over your old car loan. Contact your lender if you have any questions about the payments or loan.

With Caribou, you could start saving today!

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Contact Details
NMLS #1746612

Mon - Fri: 9am - 8pm EST

Sat - Sun: 9am - 4pm EST

1717 Rhode Island Ave, NW, Suite 500 Washington, DC 20036

Caribou Insurance Services, LLC
Mon - Fri: 9am - 8pm ET

* Refinance savings may result from a lower interest rate, longer term, or both. There is no guarantee of savings. Your actual savings, if any, may vary based on interest rates, the repayment term, the amount financed, and other factors.

+ To check the refinance rates and terms you qualify for, we conduct a soft credit pull that will not affect your credit score. However, if you choose a loan product and continue your application, we or one of our lending partners will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

++ Social security number is required should you choose to move forward in the loan application process.

** APR is the Annual Percentage Rate. Your actual APR may be different. Your APR is based on multiple factors including your credit profile and the loan to value of the vehicle. Advertised 1.99% APR is based on a representative example of refinancing a 2021 or newer vehicle with mileage of less than 85,000 miles and a FICO score higher than 740. Lowest Rate not available in CA, ME, MD, MS, NE, NV, PA, WV, WI and VT. Not all borrowers will receive the lowest rate. All applications are subject to verification of employment. We do not guarantee that you will receive any loan offers or that your loan application will be approved. If approved, your actual rate will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Insurance savings will not result from lower APR.

Terms and Conditions apply. Caribou reserves the right to modify or discontinue products and benefits at any time without notice. Participating lenders, rates and terms are also subject to change at any time without notice. The information you provide to us is an inquiry to determine whether our lenders can make you a loan offer. If any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. We do not guarantee that you will receive any loan offers or that your loan application will be approved. If approved, your actual rate will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors.

Insurance products offered through Bindable and Caribou Insurance Services, LLC. Caribou is working with Bindable who owns MyLifeProtected and MassDrive Insurance Group, LLC, the licensed agent for all products.

©2022 Caribou Financial, Inc. d/b/a Caribou. All rights reserved.