What Bank of America refinancing means and how it works
Refinancing an auto loan at Bank of America means replacing your current car loan—whether it's with Bank of America or another lender—with a new loan from Bank of America. The bank pays off what you still owe on your old loan, and you start making payments to Bank of America instead, ideally at a better interest rate or with different terms that fit your budget better.
Bank of America offers auto refinancing to existing customers and to people who are new to the bank. The process typically takes one to two weeks from process to funding. You'll need your current loan documents, proof of income, and details about the vehicle you're refinancing. Bank of America will pull your credit report and verify the car's value before making an offer.
The main reason people refinance is to lower their interest rate, which reduces what you pay each month and over the life of the loan. A second reason is to change the loan term—for example, switching from a 72-month loan to a 60-month one to pay off the car faster, or extending it to lower your monthly payment if money is tight right now.
Key Takeaways
- Bank of America refinancing replaces your existing auto loan with a new one, usually to get a lower interest rate or change your monthly payment.
- You must be a Bank of America customer or open an account to refinance through them, and the process takes one to two weeks.
- Your new interest rate depends on your credit score, income, the car's age and mileage, and current market rates—not all borrowers receive the same rate.
- Bank of America can refinance cars that are financed through other lenders, but not vehicles you own outright or cars older than a certain age (typically 10 years).
- Refinancing costs little or nothing upfront, but you may pay a small fee if you refinance again within a short time frame.
Who can refinance through Bank of America
Bank of America requires you to be a customer to refinance with them. If you don't have a Bank of America checking or savings account, you'll need to open one before you can explore for a refinance. This takes about 10 minutes online or in a branch.
Your car must meet certain conditions. It typically cannot be older than 10 years, and it cannot have more than 125,000 miles on it, though these limits vary by location and change over time. The vehicle must be financed—meaning you still owe money on it—and it must be registered in your name. Bank of America will not refinance a car you own outright.
Your credit score matters, but Bank of America works with borrowers across a range of credit profiles. If your credit has improved since you took out your original loan, refinancing can reward that improvement with a lower rate. If your credit is still building, you may still be offered a refinance, though the rate may not be significantly lower than what you're paying now.
How to start the refinancing process
You can begin a refinance process online through Bank of America's website, by phone at 1-800-432-1000, or in person at a branch. Online is usually fastest—you can complete the initial process in 10 to 15 minutes.
Have these documents ready before you start: your current auto loan account number or loan documents showing what you still owe, your driver's license, proof of income (recent pay stubs or tax returns), and the vehicle identification number (VIN) from your car's registration or title. Bank of America will ask for your employment information and monthly expenses to verify you can afford the new loan.
After you submit your process, Bank of America will order a vehicle valuation report to confirm the car is worth enough to find the loan. This usually takes two to three business days. You'll receive a loan offer by email or phone that shows your new interest rate, monthly payment, and loan term. You can accept, decline, or ask questions before committing.
Interest rates and what affects your offer
Bank of America does not publish a single refinance rate because rates vary based on your individual situation. Your rate depends on your credit score, how much you still owe compared to the car's value, your income and employment history, the car's age and mileage, and the current market rate for auto loans.
If you have a credit score above 700, you're more likely to receive a competitive rate. Scores between 650 and 700 may still may have access to for refinancing, but the rate may be closer to what you're currently paying. Scores below 650 can still refinance, though the rate may not improve much or at all.
The amount you still owe matters too. If you're "underwater" on your loan—meaning you owe more than the car is worth—Bank of America may decline to refinance or offer a higher rate to offset the risk. You can check your car's value using Kelley Blue Book or NADA Guides to get a sense of where you stand before you explore.
What happens after you accept an offer
Once you accept Bank of America's loan offer, the bank will order a title search and verify your insurance. You'll need to provide proof that your car is insured, and the insurance must list Bank of America as the lienholder (the bank that has a legal claim to the car until the loan is paid off). Your current insurance company can add this in one phone call, usually at no cost.
Bank of America then pays off your old loan directly. This typically happens within three to five business days. Your old lender will release the title, and Bank of America will become the new lienholder. You'll stop making payments to your old lender and start making them to Bank of America on the date specified in your new loan agreement.
Your first payment to Bank of America may not be due for 30 to 45 days after the loan funds, depending on the timing. Bank of America will send you payment instructions and set up online access to your loan account so you can make payments, check your balance, and see your payoff date.
Costs and fees to know about
Bank of America does not charge an origination fee or process fee for auto refinancing. There are no upfront costs to refinance. However, your old lender may charge a prepayment penalty if you pay off the loan early—this is a fee they charge when you close the loan before the term ends. Bank of America cannot waive this fee because it goes to your old lender, not to Bank of America. Check your original loan documents or call your current lender to learn about a prepayment penalty applies.
If you refinance again with Bank of America within a certain time frame (typically within 12 months), the bank may charge a fee or decline to refinance. This is to prevent people from repeatedly refinancing to take cash out or to avoid paying the loan off.
Refinancing does not cost you money in the form of fees, but it does reset your loan term. If you were three years into a five-year loan and you refinance into a new five-year loan, you've extended your total payoff time by three years, which means you'll pay more interest overall even if your rate is lower. Use a loan calculator to compare your total interest paid under your current loan versus the refinanced loan before you commit.
When refinancing makes sense and when it doesn't
Refinancing makes sense if your interest rate will drop by at least 0.5 to 1 percent. At that threshold, the savings in interest usually outweigh any costs or hassle. If you're currently paying 6 percent and Bank of America offers 5 percent, that's a meaningful savings. If you're at 5 percent and the offer is 4.9 percent, the difference is small enough that refinancing may not be worth your time.
Refinancing also makes sense if you need to lower your monthly payment because your financial situation has changed. Extending your loan term from 48 months to 60 months will reduce your payment, though you'll pay more interest overall. This is a trade-off worth making if you need the breathing room in your budget right now.
Refinancing does not make sense if you're planning to sell or trade in the car within the next year or two. The refinance process takes time and money (even if no upfront fee), and you won't recoup those costs if you're getting rid of the car soon. It also doesn't make sense if you're very close to paying off your current loan—if you have only 12 months left, refinancing into a new 48-month loan extends your debt unnecessarily.
Frequently Asked Questions
Can I refinance a car I financed through another bank?
Yes. Bank of America can refinance cars financed through any other lender—credit unions, other banks, or captive lenders like Ford Credit or GM Financial. You don't have to have financed the car through Bank of America originally. Bank of America will pay off your old loan and become the new lienholder.
How long does the refinance process take from start to finish?
The process itself takes 10 to 15 minutes online. Bank of America typically provides a loan offer within two to three business days. Once you accept, funding usually happens within three to five business days. Total time from process to receiving your first payment instructions is usually one to two weeks.
What if my credit score has dropped since I got my original loan?
Bank of America will still consider your process, but a lower credit score may result in a higher interest rate or a declined offer. If your score has dropped significantly, you may want to wait a few months to rebuild it before refinancing. Paying bills on time and reducing credit card balances can help raise your score.
Can I refinance if I'm behind on my current loan payments?
Bank of America typically will not refinance if you're currently behind on your auto loan. You'll need to bring your account current first. Once you've made your payments on time for at least a few months, you can reapply for refinancing.
What happens to my old loan documents after Bank of America pays it off?
Your old lender will send you a notice that the loan has been paid in full and will release the title to you or directly to Bank of America, depending on your state's process. Keep this notice for your records. You don't need to do anything with your old loan documents—the old lender handles the closeout.