Refinancing a car loan can help reduce your monthly payments or secure a better rate. But before lenders can make an offer, they’ll want to see proof that you’re a reliable borrower. That means there will be paperwork involved, and having the right documents ready can help move things along more quickly and smoothly.
If you’re thinking about switching lenders or adjusting your current car loan, read on to know what you’ll need.
Proof of identity and address
To start, lenders will ask for proof of identity to confirm who you are. A valid driving licence is usually enough. Some may also request your passport, especially if your driving licence doesn’t show your current address. Lenders also need to confirm where you live. For this, a recent utility bill, bank statement, or council tax bill (dated within the last 3 months) will do.
Employment and income documents
Lenders want to know you can afford repayments. To confirm this, they’ll usually ask for your last 3 months’ payslips. If you’re self-employed, you may need to show SA302 tax calculations from HMRC or an accountant’s reference.
Bank statements covering the same 3-month period might also be required. These help lenders assess your regular income and spending habits. This part is crucial when applying for car refinance, as lenders assess your financial stability before approving better terms.
Vehicle information and logbook
You’ll also need to show details about the vehicle you’re refinancing. The V5C logbook is essential. It proves ownership and lists key information about the car, like make, model, and registration.
If you’re not the registered keeper, most lenders won’t proceed. Some may accept applications if the V5C is being updated, but this is rare. You may also be asked for the original finance agreement. This helps the new lender understand your current balance, interest rate, and any early settlement fees.
Credit check permission
Most lenders will run a credit check, so they need your permission first. This may be a soft search at the start, followed by a hard search if you decide to proceed. Be prepared to sign a declaration or consent form as part of your application.
Your credit score won’t decide everything, but it can affect the offers you receive. A strong report often leads to better interest rates and more flexible terms.
Insurance and MOT proof
Some lenders may also want to confirm that the car is fully insured and roadworthy. You could be asked to show a valid MOT certificate if the vehicle is over 3 years old. A current insurance policy document may also be requested, especially for higher-value cars. These prove that the vehicle is in legal use and properly maintained.
Be prepared and stay organised
It’s smart to keep digital or physical copies of these documents ready before you apply. Missing paperwork can delay the process or lead to rejection. If anything is out of date, like an address on your licence, update it before starting your application. Keeping your financial records tidy can help you act quickly when better car refinance offers appear.
Wrapping up
Refinancing a car is straightforward when your documents are in order. From ID and payslips to the V5C logbook, having the right paperwork ready makes everything smoother. Take time to check each requirement before you apply. It could be the difference between a quick approval and an avoidable delay.
