What refinancing a car loan means and how Wells Fargo handles it
Refinancing a car loan means replacing your current loan with a new one, usually at a different interest rate or term length. When you refinance through Wells Fargo, the bank pays off what you still owe on your existing loan, and you begin making payments to Wells Fargo instead of your original lender. The goal is typically to lower your monthly payment, reduce the total interest you pay over the life of the loan, or both.
Wells Fargo offers auto refinancing to customers who already have a car loan elsewhere. The process involves submitting information about your current vehicle and loan, undergoing a credit check, and receiving an offer if approved. If you accept, Wells Fargo handles the paperwork with your old lender and your state's motor vehicle department.
Key Takeaways
- Refinancing works best if your credit score has improved since you took out your original loan, because a better score usually means a lower interest rate.
- Wells Fargo refinances vehicles that are at least two model years old and have fewer than 120,000 miles, though these requirements can vary.
- The refinancing process typically takes one to two weeks from approval to funding, during which your original lender still owns the vehicle title.
- You will need your current loan documents, vehicle information, and proof of insurance to start the refinancing request.
- Refinancing makes the most financial sense if your new interest rate is at least one percent lower than your current rate.
When refinancing through Wells Fargo makes financial sense
Refinancing saves you money only if the new loan costs less overall than keeping your current one. The main reason to refinance is a lower interest rate. If your credit score has improved since you took out your original loan—because you have paid bills on time, paid down other debts, or corrected errors on your credit report—you may now may have access to for a better rate than before.
Run the numbers before you start. Take your current loan balance, remaining term, and current interest rate, then compare them to what Wells Fargo offers. A rate that is one percent lower usually makes refinancing worth the effort. A rate that is half a percent lower may not, depending on how much you still owe and how long you have left to pay.
Refinancing also makes sense if you need to lower your monthly payment because your financial situation has changed. Extending the loan term—say, from 48 months to 60 months—reduces what you pay each month, though you will pay more interest overall. Shortening the term does the opposite: higher monthly payment, less total interest.
What Wells Fargo requires before you can refinance
Wells Fargo has specific requirements for the vehicle and loan you want to refinance. The car must be at least two model years old (some lenders require three), have fewer than 120,000 miles, and be in good condition with no major damage. You cannot refinance a vehicle that is still under a manufacturer's warranty buyback or that has a lien from another party besides your current lender.
Your loan must also meet certain criteria. Most lenders, including Wells Fargo, require that you have been making payments for at least six months before refinancing. The loan balance typically needs to be at least $7,500, though this varies by location and your credit profile. If you are underwater on your loan—meaning you owe more than the car is worth—refinancing becomes much harder or impossible.
You will need to provide proof of insurance, your current loan documents (or the loan number), and the vehicle's identification number (VIN). Wells Fargo will order a vehicle history report to check for accidents and title problems.
How to start a refinance request with Wells Fargo
You can begin the refinancing process online through Wells Fargo's website, by phone, or in person at a branch. Online is usually fastest. Go to the Wells Fargo auto refinancing page, enter your vehicle and loan information, and receive an initial offer within minutes. This offer is based on the information you provide and does not require a hard credit inquiry yet.
If you proceed, Wells Fargo will perform a hard credit check, which temporarily lowers your credit score by a few points. The bank will then order a vehicle inspection report and verify your current loan details with your existing lender. This stage typically takes three to five business days.
Once approved, you will receive a formal offer with the new interest rate, monthly payment, and loan term. You can accept or decline without penalty. If you accept, Wells Fargo will contact your current lender to request a payoff quote and coordinate the title transfer with your state's motor vehicle department.
What happens between approval and when you start paying Wells Fargo
After you accept Wells Fargo's offer, the bank sends the payoff amount directly to your current lender. Your original lender releases the vehicle title to Wells Fargo or to your state's motor vehicle department, depending on your state's process. During this time—usually one to two weeks—you continue making payments to your original lender until they confirm receipt of the payoff.
Wells Fargo will send you loan documents to sign, either electronically or by mail. Read these carefully; they outline your new interest rate, monthly payment, due date, and any fees. Some states charge a title transfer fee, which Wells Fargo may roll into your new loan balance or charge separately.
Once the title transfer is complete and Wells Fargo receives the signed documents, the bank funds the loan and your first payment to Wells Fargo becomes due. You will receive a new payment coupon or online payment instructions. Your old lender will send you a final statement showing the loan is paid in full.
Costs and fees you may encounter
Wells Fargo does not charge an origination fee or prepayment penalty for auto refinancing, which means you will not pay extra to set up the loan or pay it off early. However, other costs may explore depending on your situation and state.
Your state may charge a title transfer fee, typically between $25 and $200. Some states also charge a registration fee if the vehicle registration needs to be updated. These fees vary widely by state and are not controlled by Wells Fargo, though the bank can tell you what to expect for your location.
If your current lender charges a prepayment penalty—a fee for paying off the loan early—you will owe that to them, not to Wells Fargo. Check your current loan documents or call your lender to find out. This penalty should factor into whether refinancing makes financial sense.
What to do if Wells Fargo denies your refinance request
Wells Fargo may decline your request if your credit score is too low, you are underwater on your loan, the vehicle does not meet their requirements, or you have not been making payments long enough. If denied, ask the bank for the specific reason. This information helps you decide whether to wait and reapply later or explore other options.
If your credit score is the issue, focus on paying all bills on time for the next few months and paying down other debts. Scores can improve noticeably in three to six months of good payment history. If the vehicle does not meet their mileage or age requirements, you will need to wait until it does or refinance through a different lender.
Other banks and credit unions also offer auto refinancing and may have different requirements. Some credit unions accept vehicles with higher mileage or older model years. Getting quotes from multiple lenders takes time but can reveal options Wells Fargo does not offer.
Frequently Asked Questions
Can I refinance a car I still owe money on to another person?
No. Refinancing replaces your loan with a new one in your name. If you want to transfer the vehicle to someone else, you would need to pay off the loan first or work with a lender that specializes in loans where the borrower and vehicle owner are different people—a rare situation.
How long does the whole refinancing process take from start to finish?
From your initial request to your first payment to Wells Fargo typically takes two to four weeks. The approval decision usually comes within a few days, but the title transfer and funding can take an additional one to two weeks depending on your state's motor vehicle department.
Will refinancing hurt my credit score?
The hard credit inquiry Wells Fargo performs will lower your score by a few points temporarily, usually recovering within a few months. However, refinancing replaces one loan with another, so your overall credit mix and payment history remain similar. Making on-time payments to Wells Fargo will help your score recover and improve over time.
What if I want to pay off the refinanced loan early?
Wells Fargo does not charge a prepayment penalty, so you can pay off the loan early without extra fees. Paying early reduces the total interest you pay. Check your loan documents for any details about how extra payments are applied.
Can I refinance if I have a co-signer on my current loan?
Yes, but the co-signer may need to be involved in the refinancing process. Contact Wells Fargo directly to ask whether your co-signer needs to sign documents or whether you can refinance on your own if your credit now supports it.