Refinancing your truck can save you money by lowering your interest rate, reducing your monthly payment, and lowering the total amount of interest you pay on your loan. We’ve evaluated the best truck refinance loans based on rates, terms, loan options, customer reviews, and overall quality.
When you check your rate, we check your credit report. This initial (soft) inquiry will not affect your credit score. If you accept your rate and proceed with your application, we do another (hard) credit inquiry that will impact your credit score. If you take out a loan, repayment information will be reported to the credit bureaus.
Although educational information is collected as part of Upstart’s rate check process, neither Upstart nor its bank partners have a minimum educational attainment requirement in order to be eligible for a loan.
The full range of available rates varies by state. The average 5-year loan offered on Upstart will have an APR of 10.56% and 60 monthly payments of $463 per $20,000 borrowed. For example, the total cost of a $20,000 loan would be $27,795. APR is calculated based on.
5-year rates offered in April 2022. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
If you’re considering refinancing your truck, know that there are many reasons why it could make sense for you. Here are some of the most common reasons people refinance their trucks:
Payment terms: Many people who refinance their vehicles do so to reduce their monthly loan payments. This can be accomplished by extending the term of the loan, which results in lower monthly payments but higher costs over the life of the loan.
Pay less in interest: You can refinance to save money on interest costs. Lower interest rates can result in smaller payments and lower costs over the life of the loan.
Tap the equity in your truck: If there’s enough equity in your vehicle, then refinancing could be an option to secure more cash without selling your car or trading it in at a dealership.
How to refinance a truck?
Here are some steps on how to refinance a truck:
Apply for a new truck loan: Once you know which lender has the lowest rate, it’s time to apply for the loan. You can typically apply for a truck loan online or over the phone.
Gather necessary documents and apply: Once you’ve decided what type of refinance loan is right for you, gather all the necessary documentation needed to apply for the loan.
Review the terms and sign the contract: Before signing any contract, review all terms carefully, so there are no surprises later on down the road. Ensure that you understand exactly how much those payments cost each month.
What affects truck loan interest rates?
As you consider getting a refinancing your truck loan, keep these factors in mind to help you find the best rate:
Credit score: Your credit score directly affects a truck loan’s interest rate. The higher your credit score, the lower the interest rate. If you have a low score, you may find getting approved for a refinancing difficult.
Length of term: The longer the term of your loan, the more interest you’ll pay over the life of the loan.
Debt-to-income ratio: This is the amount of average monthly debt payments divided by gross monthly income. Lenders use this to determine how much you can afford to borrow on a truck loan. For example, if your debt-to-income ratio is 50 percent, half of your income goes toward paying off monthly debts.
Market rates: The general market rate in the economy also affects truck loans. If the central bank raises rates, the interest rate on the refinance loan will also increase.
Can you refinance your truck for more than you owe?
If you want to refinance your truck but have negative equity in the vehicle, that doesn’t mean it’s not possible. Lenders know vehicles depreciate quickly, so they are aware of upside-down vehciles.
However, keep in mind that if you are looking at refinancing a truck loan, then you will most likely be required to have a job with a steady income. Lenders require proof of income when they give out loans.
Does refinancing a truck hurt your credit?
In most cases, refinancing your truck has little impact on your credit score as it’ll only temporarily negatively affect it during a hard credit pull, but it can improve it in the long run.
Since refinancing doesn’t increase your overall debt payments but frees up more money if you got a lower rate, it can help bring down the debt-to-income ratio and improve your score.
Can you refinance a truck loan with bad credit?
If you have bad credit, you can still refinance your truck loan but will have fewer options. Your terms will not likely be the best as you’ll more likely have to pay a higher interest rate and might need a co-signer.
How to choose the best truck refinance loans
If you’re considering refinancing your truck loan, here’s what you need to know:
Shop around: Find out what kind of rates other lenders are offering and compare them with what your current lender is offering. If you’re in good standing with your current lender, they may be willing to match or beat another lender’s offer.
Requirements for refinancing: Most lenders require that you have a good credit score, a stable income, and sufficient assets to secure the loan. They also want proof of employment, such as W-2s or 1099s.
Customer service: Customer service is key if you have questions about your loan or need help. Look for an easy way to reach someone if you need assistance with your account or payment options. You should also check their responsiveness to emails and phone calls to know if they’re available when you need them most.
Perks: Some companies offer perks with their truck refinance loans. These could include lower interest rates or automatic payments to help you save money on interest. You can also find programs that allow you to repay the loan early, saving money in the long run.
