Can You Refinance a Car Loan if You Have SSI?

Can You Refinance a Car Loan if You Have SSI?

Yes, you may be able to refinance a car loan if you receive SSI benefits. But some lenders are hesitant to accept SSI payments as a reliable source of income. That's because SSI payments are nontaxable and can't be garnished if you default on the car loan. This increases risk for the lender.

Plus, many lenders have minimum income thresholds to qualify for refinancing. These limits vary with each lender and may depend on the borrower's specific car loan, but they often start around $1,500 per month.

In 2025, the maximum monthly SSI payment is $967 for an individual and $1,450 for a couple. So some car owners looking to refinance based on SSI payments may not have sufficient income to qualify.

Should You Refinance a Car Loan if You Have SSI?

The decision to refinance a car loan while earning SSI depends on your loan terms and financial situation. Borrowers typically refinance a car loan to get a lower interest rate, change the term or borrow cash. If you're on SSI, you might consider refinancing if any of the following apply to your situation:

• Lower interest rates are available. Auto loan interest rates dipped toward the end of 2024, according to Experian's State of the Automotive Financing Market report for the third quarter of 2024. If you qualify for a lower rate than what you're currently paying, refinancing can help save you money.
• You need lower monthly payments. If you need to put more room in your budget, you could extend your loan term and lower your monthly payments—just know you'll end up paying more in interest over a longer term.
• You want to avoid repossession. Your lender may offer refinance options to help you avoid repossession if you've defaulted on a car loan.
• You're removing a cosigner. Depending on your lender's rules and the agreement you signed, you may need to refinance in order to remove a cosigner from your auto loan.

Learn more: When Does It Make Sense to Refinance a Car Loan?

How to Refinance a Car Loan if You Have SSI

It's possible to refinance a car loan if you receive SSI, but it's typically a more challenging process. Here are the steps to refinance a car loan with SSI.

1. Check Your Credit Score

Your credit score can affect whether you qualify for a refinance loan and the rate you receive. Generally, having good credit can improve your chances of qualifying. It may also boost your chances of securing favorable terms.

Good credit usually means your FICO^® Score^☉ is 670 or higher. Based on where your credit stands, you may decide to improve your credit score before applying for the new auto loan.

You can check your credit report and FICO^® Score with Experian, using what you learn to decide whether now is the time to apply or if you should work on improving your credit first.

2. See Which Lenders Accept SSI as Income

Start researching a mix of different types of lenders to find ones that accept SSI benefits as proof of income. It might be harder to qualify with large national banks, which typically have high income and credit requirements. But community banks, credit unions and online-only lenders may be more willing to work with borrowers who have SSI income.

Once you find lenders that accept SSI as income, check whether any use a prequalification tool to provide offers and rates. These tools typically use a soft credit pull to review your credit profile, which won't ding your credit scores.

3. Consider Adding a Cosigner

If your SSI payments aren't enough to cover your existing monthly debts and a new monthly auto loan payment, consider adding a cosigner to the loan. A cosigner with good credit and regular income can help strengthen your car loan application.

They should understand that cosigning the loan makes them legally liable for the debt. If you default on payments, the cosigner would need to step in and pay the bill.

Learn more: Should You Get a Cosigner on a Car Loan?

4. Compare Your Offers

Getting multiple auto loan quotes and comparing offers can help you find the best refinance loan. Once you have several offers in hand, compare the following factors on each loan:

• Interest rate
• Repayment terms
• Fees and penalties
• Monthly payment

5. Gather the Required Documents

You'll typically need to provide information and documents with your car loan refinance application. Gathering them now can help speed up the process. The items you may need to share include:

• Copy of your driver's license
• Proof of car insurance
• Proof of income, such as your SSI benefit verification letter
• Proof of residence
• 10-day payoff statement from your current lender
• Vehicle identification number (VIN)

If you're adding a cosigner to your loan, they'll need to provide identification and proof of income as well. They'll also need to give the lender permission to run a credit check.

6. Submit Your Application

Now you'll choose a lender and fill out the application. Many lenders allow you to complete this step online, though you may be able to do it over the phone or in person at a branch. You'll also need to submit the documents noted above.

7. Review and Sign the New Loan Agreement

If the lender approves your application, you'll read through the loan terms and ask any questions you have. Then you'll sign the agreement. From here, your new lender may contact the old lender to pay off your former loan.

Frequently Asked Questions

The Bottom Line

It may be possible to refinance a car loan when you receive SSI benefits, but you'll need to research lenders that accept this type of income. Having strong credit may improve your chances of getting approved. After monitoring your credit and tracking your progress, you can get car loan quotes and compare offers.