Does Capital One Offer Auto Refinancing? How to Get It?

Capital One has an auto loan refinancing option. You must have an auto loan with any other bank than Capital One to apply for refinancing.

You can apply for refinancing online and compare different loan terms with easy prequalification without hurting your credit score.

Let us discuss what is Capital One Bank’s auto loan refinancing program and how it works.

Does Capital One Offer Auto Refinancing?

Yes, Capital one offers auto loan financing and refinancing. You can apply for a car loan refinancing online with Capital One.

The application process, evaluation, and finalization of your loan refinancing are completely online. You do not need to visit a branch physically.

Capital One allows prequalification to you for easy comparison of different loan options. Once you pass the prequalification, you’ll get different options from Capital One.

You have 30 days after prequalification to decide on your preferred refinancing loan terms. Then, you can proceed with the refinancing loan and provide the necessary documents as required.

Capital One does not put a hard credit check for your loan prequalification. However, once your application is processed, it will put a hard credit inquiry that may also change your final loan terms.

Why Apply for Capital One Auto Refinancing?

If you have an existing auto loan with any other bank, you can apply for auto loan refinancing with Capital One.

Here are a few top reasons to consider when applying for refinancing.

Save Money

Most borrowers look for loan refinancing with variable interest rates. When you get favorable interest rates, you may want to apply for refinancing to lower your monthly car payments.

If your current loan is young, you may save handsome money in the long run with refinancing. You can compare different options at Capital One with prequalification without hurting your credit score.

Lower APR

In many cases, borrowers get a high APR when their credit scores are down. If you have built your credit score over time and worked to improve your creditworthiness, you may get a better deal with refinancing.

Lowering your APR on a car loan is another solid reason to look for in refinancing. Again, compare your options freely before making the final decision.

Pay off Auto Loan

If you want to shorten the car loan term, consider refinancing. It is suitable for borrowers with improved income streams and savings.

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Contrarily, you may look to extend your existing car loan through refinancing and lower the monthly installments. Both options can work in your favor depending on your current financial situation.

How to Get Capital One Auto Refinancing?

One of the several advantages of Capital One auto loan refinancing is that you can complete the full process online.

Here are some key steps to remember.

Prequalification

The first step is to prequalify for a loan refinancing. It does not harm your credit score as Capital One puts a soft credit check at this stage.

You can compare different loan terms when approved. Your prequalification result is instantaneous.

Compare Options

If your prequalification is approved, Capital One will show you different loan options. You can compare loan terms, monthly installment amounts, and APRs.

However, your chosen plan terms and APR may change later when a hard credit inquiry is performed by Capital One. It may happen if your initial information provided to the bank is different from the actual one.

Apply Online

In the next step, you’ll choose the best refinancing loan option. Once you apply, Capital One bank will review it further.

In the detailed review, the bank will put a hard credit check and may ask for additional information like your pay stub, previous loan details, and employment details.

Finalize Refinancing

If your previously provided information matches your current information, you’ll get a similar loan term.

Capital One will formally send you the loan details and if you agree to the terms, you’ll sign the loan agreement electronically.

What Do you Need to Apply for Capital One Auto Loan Refinancing?

You do not need to submit documents physically at the prequalification stage. However, you’ll need to provide some important information at each stage.

Documents and Information

You must be 18 years old to apply for refinancing. Although Capital One bank does not require a specific credit score, you must be in good standing for your previous loans.

If you have any other type of loan like a mortgage, you must not be in default.

Other than that, you only need to provide personal information, a street address, social security number, and contact number.

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Income Requirement

Capital One requires a minimum monthly income of $1,500 from borrowers. The bank may require proof of income, employer details, and other relevant information during your loan application processing.

Vehicle Requirement

Capital One Bank offers to refinance for new and old cars. However, old cars must not be older than 10 years. It is available for personal vehicles like SUVs, minivans, and cars.

Some restricted cars for refinancing include motorcycles, commercial vehicles, restricted vehicles (RVs), boats, and camping vans. 

Loan Amount

Capital One Bank’s minimum refinancing loan amount is $ 7,500 and the maximum amount is $50,000.

However, the actual loan amount varies by vehicle type and residual value. If you are refinancing an old car, your refinancing value will depend on your loan-to-vehicle ratio and the residual value of the car.

Features of Capital One Auto Loan Refinancing

Capital One Bank’s loan refinancing comes with several discrete features. Here are a few of them.

APR

Capital One does not disclose the annual percentage rate (APR) for its refinancing and financing loans. It will depend on the creditworthiness of the borrower largely.

Several other factors like the loan term, loan amount, and vehicle residual value will also affect your final APR.

Lifetime and Yearly Payment Reduction Claim

Most borrowers apply for auto loan refinancing to save money on the total remaining balance of their existing loan amounts.

Capital One Bank claims to offer substantial savings on a monthly, yearly, and lifetime payment reduction basis for its borrowers of refinancing.

Prequalification with Soft Credit Check

One of the key features available at Capital One bank is the ability to prequalify for financing or a refinancing loan.

The bank only puts a soft credit check at this stage and it does not harm your credit score. However, when your loan application is processed, it will cost you a few credit points.

High Approval Rate

Most applicants get their refinancing applications approved. Capital One Bank claims 9 out of 10 refinancing applicants get a loan approved.

Your chances of approval depend largely on your credit score, monthly income, vehicle residual value, and your credit history.

Fully Online Application Process

Another key feature of refinancing at Capital One bank is that the loan application process is fully online.

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You can check loan eligibility through prequalification and compare different options before signing the final loan agreement.

Then, your loan agreement is signed through e-signatures.

Important Considerations with Capital One Refinancing

Let us now discuss a few important points about the refinancing option at Capital One that you must remember before making the final call.

No Originating Fee

Capital One does not charge you a loan originating fee. It can be good savings for you as compared to some other lenders who charge loan originating fees.

You May Need to Pay the Differential Amount

Usually, borrowers do not need to make a down payment with a loan refinancing. However, you may need to settle the difference between the current loan amount and the refinancing loan amount.

For instance, if you have a loan outstanding amount of $ 30,000 and Capital One assesses your refinancing amount to be a maximum of $25,000. You’ll have to pay the difference of $5,000 to your old lender.

Prepayment Penalties

There are no loan prepayment penalties at Capital One. So, if you want to repay your auto loan early, you can settle it without incurring any penalties from the bank.

Ownership and Title Transfer

Once you finalize the refinancing deal, Capital One bank automatically becomes the title owner of your vehicle until your loan term matures.

You must be registered as the vehicle owner with the car dealer or your partner if you are using a co-signer.

Additional Document Requirements

The bank may need some additional documents from your side during the loan application process.

Some important documents required include:

  • Proof of income such as Pay stubs or bank statements
  • Proof of Residence like Insurance, lease agreement, or mortgage statement
  • Vehicle Title
  • Limited Power of Attorney in favor of the bank to file the lien.

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