Can You Refinance Your Car After Two Years of on Time Payments Without a Co-Signer?


After paying a car loan for two years, you should have a positive loan payment history even if you used a co-signer.

However, your credit score does not rely solely on one loan. Banks also consider various personal and credit information, such as your debt, employment status and the time you’ve lived at your current address.


Your Credit Report

Take a look at your credit history and score before applying for a refinance. If you originally needed a co-signer because of poor credit, ensure your current credit report reflects on-time payments over the past two years. provides one free credit report each year from the three major credit bureaus. You can’t obtain your score for free, but purchasing it may prove worthwhile.

If you any find errors, correct them with the credit bureau and business who reported the inaccuracy before applying for your refinance.


Refinance Your Car After Two Years


Bank Determining Factors

Banks determine your loan eligibility based on your income and other information. You must prove that you can afford your car payment and the other bills or debt that appear on your credit report.

Expect to prove your income by providing a lender with your most recent paystub. Banks prefer a consistent two-year employment and address history.

Banks also consider your mortgage or rental payment to determine if you can afford your car payment. You should not apply for a loan while your credit report shows past-due accounts.


Application Process

To apply for another loan, have your personal information ready to provide to the lender, such as your Social Security number and date of birth. You’ll need the name, address and telephone number of your employer.

Figure out your gross annual income based on your most recent paystub. Some banks require the name of your mortgage company or landlord to verify your monthly housing payment.

Obtain your loan’s payoff amount so you know how much to apply for. Have your VIN (vehicle identification number) on hand; you can find it on your title or insurance card.


Transferring the Loan

If you owe more than your car is worth, you might have to put money down. Once your application is approved, you can discuss your approval rate, term and monthly payment with your lender before signing contracts.

Once you agree to the terms, the co-signer must sign his portion of the title to release ownership. Expect to provide proof of insurance to your lender, as well. Your new lender then pays off your old loan and becomes the new titled lien holder.


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