Bank of America's Refinance Process and What It Costs
Bank of America allows you to refinance a car loan through its auto lending division, whether the original loan came from Bank of America or another lender. The process involves submitting an process, providing documentation about your current vehicle and loan, and waiting for approval — typically three to five business days. Bank of America charges no process fee, but the refinance itself involves a new loan that replaces your old one, meaning you'll pay closing costs that vary based on your state and the loan amount.
The actual cost of refinancing depends on what rate you receive. If your credit score has improved since you took out the original loan, or if interest rates have dropped, refinancing can lower your monthly payment or shorten your loan term. If rates have risen or your credit has declined, refinancing may cost you more over the life of the loan. Bank of America publishes current rates on its website, but the rate you receive depends on your credit profile, the vehicle's age and value, and how much you still owe.
One practical constraint: Bank of America will refinance vehicles that are no more than 10 years old and have fewer than 100,000 miles, though exceptions exist for newer luxury vehicles. The loan amount must be at least $7,500. If your car is older or has higher mileage, you'll need to explore other lenders.
Key Takeaways
- Bank of America charges no process fee for refinancing, but you will pay closing costs that vary by state and loan size.
- Approval typically takes three to five business days once you submit your process with proof of income, vehicle details, and your current loan information.
- You must own a vehicle no more than 10 years old with fewer than 100,000 miles, and the new loan must be at least $7,500.
- Your new interest rate depends on your current credit score and income, not on the rate you originally received — refinancing makes sense only if rates have dropped or your credit has improved significantly.
Documents You'll Need to Gather Before explore
Bank of America requires specific paperwork to process a refinance process. You'll need proof of income (recent pay stubs, tax returns, or bank statements showing regular deposits), a government-issued ID, and proof of residence (a utility bill or lease dated within the last 60 days). You'll also need details about your current loan: the lender's name, your account number, and the payoff amount.
For the vehicle itself, you'll provide the vehicle identification number (VIN), current mileage, and proof of insurance. If you're refinancing a loan from another lender, Bank of America will contact that lender directly to confirm the payoff amount and lien status, so you don't need to obtain those documents yourself. However, having them on hand speeds up the process.
How the Payoff and Title Transfer Work
When Bank of America approves your refinance, it issues funds to pay off your existing loan in full. The old lender releases the lien on your vehicle's title, and Bank of America becomes the new lienholder. This process typically takes 7 to 10 business days after approval. During this time, you continue making payments to your original lender as scheduled — do not skip payments, as the old loan remains active until the payoff is complete.
Once the payoff clears, your new Bank of America loan begins, and your first payment is due according to the schedule in your new loan agreement. Some borrowers see a gap of a few days between their last payment to the old lender and their first payment to Bank of America; this is normal and does not affect your credit. Bank of America will provide you with a new payment coupon book or online payment portal access once the loan is funded.
When Refinancing Makes Financial Sense
Refinancing saves money only in specific situations. If your credit score has risen by 50 points or more since you took out the original loan, you'll likely receive a lower rate. If the current market rate for your loan term is at least 0.5 to 1 percentage point lower than your current rate, the monthly savings may justify the closing costs. Use Bank of America's rate calculator on its website to compare your current rate against what you'd receive today.
The break-even point depends on how long you plan to keep the car. If you're refinancing into a longer loan term to lower your monthly payment, you'll pay more interest overall, even if the rate is lower. If you're refinancing into a shorter term, you'll pay off the car faster but your monthly payment may not drop much. Calculate the total interest you'll pay over the life of both loans to see the real difference.
Refinancing does not make sense if you're planning to sell or trade in the car within the next two years, because closing costs won't be recovered by the time you move on. It also doesn't make sense if your credit has declined or if rates have risen since your original loan.
Bank of America's Rates Compared to Other Lenders
Bank of America's refinance rates are competitive but not always the lowest available. Credit unions, online lenders like LightStream and SoFi, and other banks often offer rates within 0.25 to 0.75 percentage points of Bank of America's published rates, depending on your credit profile. The difference between a 4.5% rate and a 4.0% rate on a $20,000 loan over 60 months is roughly $500 in total interest.
Bank of America's advantage is convenience if you're already a customer — you can refinance through your existing online banking portal and have funds move quickly between accounts. The disadvantage is that you may not receive the lowest possible rate. If you have excellent credit (740 or higher), shopping around with at least two other lenders takes 15 minutes and could save you hundreds of dollars. If your credit is fair to good (650 to 739), Bank of America's rates are usually within the market range.
What Happens to Your Original Loan Agreement
Once Bank of America pays off your original loan, your old loan agreement ends. You are no longer bound by its terms, and the original lender has no further claim on the vehicle. However, if your original loan had a prepayment penalty (rare but possible), that penalty would be charged by the old lender before the payoff is complete. Bank of America does not charge prepayment penalties on its refinance loans, so you can pay off the new loan early without extra fees.
Your credit report will show the old loan as paid in full and closed, and the new Bank of America loan will appear as a new account. This causes a small, temporary dip in your credit score (typically 5 to 10 points) because a new inquiry and new account are recorded. The impact fades within a few months, and the lower interest rate usually outweighs this temporary effect.
Frequently Asked Questions
Can I refinance a car loan I got from a different bank?
Yes. Bank of America refinances loans from any lender — credit unions, other banks, online lenders, or dealership financing. You'll need your current loan account number and the lender's contact information. Bank of America contacts the old lender directly to confirm the payoff amount, so you don't have to.
What if I owe more than the car is worth?
Bank of America will refinance an underwater loan (where you owe more than the vehicle's market value), but the amount you can borrow is capped at the vehicle's current market value plus 125% in some cases. You may need to pay the difference out of pocket, or the refinance may not be possible. Contact Bank of America directly to discuss your specific situation.
How long does the entire refinance process take from start to finish?
Approval takes three to five business days. The payoff and title transfer take an additional 7 to 10 business days. Total time from process to your first payment on the new loan is usually 10 to 15 business days. Weekends and holidays extend this timeline.
Can I refinance if I'm behind on my current car loan?
Bank of America generally does not refinance loans where the borrower is 30 days or more behind on payments. If you're current but struggling with payments, refinancing into a longer term may lower your monthly obligation, but you'll need to bring the account current first.
Does refinancing hurt my credit score?
Refinancing causes a small temporary dip (5 to 10 points) because a new credit inquiry and new account are recorded. This impact fades within a few months. Over time, the new loan can help your credit if you make on-time payments, because it adds to your credit mix and payment history.