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Refinance Your Auto Loan

Lower your rate, payment or both when you refinance.

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Please note, membership is required to accept a DCU vehicle loan. Click here for more information about membership eligibility.

How to Refinance Your Auto Loan

Are you unhappy with your auto loan? Maybe you’re paying a high interest rate or aren’t comfortable with the cost of the monthly payments. If so, an auto loan refinance may be right for you. And the process of refinancing is simpler than it may sound. Here’s how it works:

1. Check your current loan. Look over your original loan contract to see if there’s a prepayment penalty. Depending on the size of the penalty, it could mean you’d be better off sticking with your current loan.

2. Research your car’s value. Use a website such as Kelley Blue Book to estimate your car’s current market value. Compare this number to how much you still owe on your loan. If the loan balance is greater than your car’s value, you’re considered upside-down on the loan. Some lenders may not refinance your auto loan in this situation. DCU gives you the option to finance up to 125% of the vehicle’s book value or the purchase price, whichever is less.

3. Assemble the information you’ll need. In order to fill out the loan application, you’ll need some information on hand. Be sure to know the outstanding amount and term of your current loan, your government ID information, your monthly income, monthly mortgage or rent payment, your Social Security number, the vehicle’s mileage, and the vehicle identification number.

4. Decide on the term length. A shorter term lets you repay your loan more quickly and pay less interest over the life of the loan. Whereas a longer term divides the principal across a longer period of time, potentially resulting in smaller payments (but also in paying more interest over the life of the loan).

5. Submit the application. If you’re submitting applications to several lenders, it’s wise to do so within a 14-day period. This will result in a smaller ding against your credit score than if you sent applications over a longer period. After submitting each application, you should expect to hear about your approval or denial anywhere from the same day to a few weeks later. 

6. Sign off. At this point, your lender may require additional information and document verification. Once the lender verifies your information and approves your application, you’ll be asked to sign the papers to transfer the car title to the new lender. Your new lender will then pay off the previous loan. You’ll receive confirmation that the refinance is complete and can start making payments to the new lender. 

Be Happy with Your Auto Loan

Ditch the loan and keep the car. Refinance your auto loan with DCU with flexible terms and competitive rates. Lower your rate, payment or both. Explore our rates, read reviews, and apply online.

Please note, membership is required to accept a DCU vehicle loan.

This article is for informational purposes only. It is not intended to serve as legal, financial, investment or tax advice or indicate that a specific DCU product or service is right for you. For specific advice about your unique circumstances, you may wish to consult a financial professional.