How to Refinance a Title Car Loan

December 4, 2013

Many people are unsure of how to refinance a title car loan and subsequently never make adjustments to loans that have high interest rates or with large monthly payments. Refinancing your title car loan can help to ease your time during a difficult economy or through personal financial difficulty by adjusting the rate of repayment on your loan according to your current needs. In order to best refinance car loans, you'll need to have a basic understanding of the process of refinancing. This process may seem daunting, but following the steps listed below will help to refinance a car loan. Poor credit and other concerns may play a part in how the loan will be refinanced, but the process of adjusting your payments is nonetheless the same.

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Step 1 -- Collect the Necessary Documents

Before you can begin the process of refinancing a car title loan, you'll need to collect several important documents. Gather the following official documents pertaining to the vehicle for which the loan was given:

  • Copy of the original loan certificate
  • Title of the vehicle, including VIN number
  • Certificate of inspection of the vehicle, detailing any adjustments or repairs that have been made since the time that the loan was originally granted

If you have any trouble locating any of these items, or you're not sure where to find them, consult your local DMV or with your insurance provider for assistance.

Step 2 -- Request the Current Payoff

In order to refinance the loan, you'll also need to know what the current payoff is. Essentially, this number indicates how much more you'll have to repay in order to completely pay off the loan as it stands. Because lenders are constantly refiguring this information, most payoff quotes are only good for a few days. Call your loan lender directly in order to request a current payoff figure, and be sure to note exactly how long the quote is valid for.

Step 3 -- Confirm your Credit Score

Your new lender will need to check your credit score in order to determine how best to refinance your loan. You can have your bank or another paid service conduct a credit check for you, or you may need to authorize a potential lender to do a credit check of their own.

Step 4 -- Select a Loan Repayment Plan

The next step is to determine how you'll pay off the loan. Consider carefully what your financial situation will be like for the duration of the repayment plan, and be careful not to overextend yourself or your resources. If you would like assistance in this matter, consult with a representative from the new lender.

Most lenders have loan repayment quotes available on their websites. You may also need to consult with the lender directly in person or over the phone, depending upon the company. The majority of quotes will be available within an hour of the time you request them, which makes comparison shopping even easier.

Step 5 -- Update All Loan Information

As soon as you've selected a new repayment plan, update your information with your bank, insurance company and make sure the lien was paid properly. This can help to avoid problems and fees later on down the line.

Find out what rates you can get for refinancing >>

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