10 mins read 
Key takeaways
- Your new lender pays off your old loan as part of the refinance process.
- Your old lender may not show a $0 balance right after you sign your new contract.
- Payoff timing can vary by lender, payment method, payoff quote, and state title requirements.
- Keep paying your old loan until your old lender shows a $0 balance.
- If you make an extra payment, your old lender will return any confirmed overpayment after the payoff clears, though timing and delivery method can vary.
When you refinance your car, your new lender pays off your old auto loan and replaces it with a new one. But your old lender may not show a $0 balance right away.
In many cases, the old loan takes several business days to update after you sign your refinance contract. Timing can vary based on your old lender, your new lender, the payoff quote, the payment method, and any title or lien steps your state requires.
The most important thing to know: Keep making payments to your old lender until your old loan shows a $0 balance.
How long does payoff usually take after refinancing?
After you sign your refinance contract, your new lender sends the payoff to your old lender. From there, your old lender has to receive the payment, apply it to your account, and update your balance.
That process often takes several business days. In some cases, it can take longer.
A short delay doesn’t mean something went wrong. The payoff has to move between lenders, and each lender has its own processing timeline.
You may also see both loans listed for a short time in your online accounts or credit monitoring tools. That can feel confusing, but it can happen during the transition from your old loan to your new one.
Why your old loan may still show a balance
Your old car loan may still show a balance after refinancing for a few reasons.
First, your old lender may not have posted the payoff yet. Your new lender may have already sent the money, but your old lender still needs time to process it.
Second, the payoff amount may have changed. A payoff quote is different from your regular loan balance because it shows the total amount needed to close the loan by a specific date. It may include daily interest, fees, or other charges. To learn more, read Caribou’s guide to the difference between a payoff quote and loan balance.
Third, a recent payment may still need to clear. If you made a payment close to your refinance date, your old lender may need extra time to apply that payment and update your account.
Finally, your title or lien update may still need attention. Loan payoff and title updates often happen around the same time, but they don’t always finish on the same day.
Should you keep paying your old car loan after refinancing?
Yes. Keep making payments to your old lender until your old loan shows a $0 balance.
This helps you avoid late fees, missed payments, and possible credit reporting issues. Even if you’ve signed your new refinance contract, your old lender may still expect payment until it applies the payoff to your account.
If your payment due date is coming up and your old loan still shows a balance, it’s usually safer to make the payment. If the refinance payoff later creates an overpayment, your old lender will return any confirmed extra amount after it closes out the account. Timing and delivery method can vary by lender.
It can feel frustrating to pay the old lender when you know the refinance is almost done. However, staying current protects you while the payoff moves through the process.
What happens if you make an extra payment?
If you make a payment to your old lender and your refinance payoff clears around the same time, you could overpay the old loan.
Your old lender will return any confirmed overpayment after it closes out the account. The refund timing and method can vary by lender. Some lenders send a check, while others return the money another way.
If your old account shows a credit balance, contact your old lender and ask how it handles refunds.
Old loan payoff vs. title transfer: what’s the difference?
Your old loan payoff and your title transfer are separate steps.
The payoff closes your loan with your old lender. The title transfer updates the lienholder on your vehicle title so your new lender appears correctly.
Depending on your state, the title update may take longer than the loan payoff. Some states process titles electronically. Others may require paper documents, original signatures, or notarized forms.
So, your old loan may show a $0 balance before the title work wraps up. If your refinance company or lender asks you for title documents, complete them as soon as you can. Missing or delayed paperwork can slow down the title update.
What should you check after refinancing?
After you refinance your car, keep an eye on a few things:
- Your old lender account. Confirm when the balance changes to $0.
- Your payment due dates. Keep paying the old loan until it shows a $0 balance.
- Your new lender account. Confirm your first payment amount and due date.
- Any refund from your old lender. Watch for a refund if your payment and the refinance payoff create an overpayment.
- Your title or lien status. Complete any title documents your lender requests.
It also helps to save copies of your refinance contract, payoff confirmation, and messages from your lenders.
If you’re still gathering paperwork before your refinance wraps up, knowing what lenders may ask for can help you avoid delays. Caribou’s guide to auto refinancing documents explains what you may need and why.
What if your old loan isn’t paid off yet?
If your old loan still shows a balance, start by checking when you signed your refinance contract. If only a few business days have passed, your old lender may still need time to process the payoff.
Next, check your old lender account. Look for recent payments, payoff activity, or account messages.
Then, check your new lender account or refinance portal. Make sure you don’t have missing documents, unsigned forms, or title steps that need action.
If your old loan payment due date is close, consider making the payment to stay current. You can follow up with your old lender if the payoff later creates an overpayment.
If the process takes longer than expected, contact your refinance provider or new lender and ask whether they sent the payoff. You can also contact your old lender and ask whether it received the payoff.
Will refinancing show as two car loans?
You may temporarily see both loans after refinancing.
Your new loan may appear before your old lender closes the old loan. Your old lender may still show a balance until it posts the payoff. Credit reports and credit monitoring tools may also need time to update.
This overlap usually doesn’t last. Once your old lender processes the payoff, the old loan will show a $0 balance or closed status. Then, you’ll make payments to your new lender going forward.
When do you start paying the new loan?
Your new lender will give you your first payment due date in your refinance agreement. Review that date carefully so you know when to start paying the new loan.
You may have some time between your old loan payoff and your first new payment, depending on your lender and contract terms. Still, keep watching your old loan until it shows a $0 balance.
Bottom line
Your old car loan may not show a $0 balance immediately after refinancing. In many cases, that’s normal.
Your new lender needs to send the payoff, and your old lender needs to process it. Title and lien updates may also take longer, especially in states that require extra paperwork.
Until your old loan shows a $0 balance, keep making payments to your old lender. Once your old lender closes the account, you can focus on your new loan, your new payment schedule, and the next step in owning your car.
FAQs: How long does it take to pay off your old car loan after refinancing?
How long does it take for my old car loan to be paid off after refinancing?
After you sign your refinance contract, your new lender typically sends the payoff to your old lender. Your old lender then needs to process the payment and update your account. This often takes several business days, but timing can vary by lender, payment method, payoff quote, and title requirements.
Should I keep paying my old car loan after refinancing?
Yes. Keep making payments to your old lender until your old loan shows a $0 balance. This helps you avoid late fees, missed payments, and possible credit reporting issues while the payoff processes.
Why does my old car loan still show a balance after refinancing?
Your old loan may still show a balance because your old lender hasn’t processed the payoff yet. A recent payment may also still need to clear, or the payoff amount may have changed because interest continued to accrue. If you’re unsure why the number changed, it helps to understand the difference between a payoff quote and loan balance.
What happens if I make a payment right before my old loan is paid off?
If you make a payment and your refinance payoff clears around the same time, you could overpay your old loan. Your old lender will return any confirmed overpayment after it closes the account. Refund timing and delivery method can vary by lender.
Will I have two car loans after refinancing?
You may temporarily see both loans in your online accounts or credit monitoring tools. That overlap usually happens because your new loan can appear before your old lender finishes processing the payoff. Once your old lender applies the payoff, the old loan should show a $0 balance or closed status.
When do I start paying my new refinance loan?
Your new lender will list your first payment due date in your refinance agreement. Review that date carefully, and keep watching your old loan until it shows a $0 balance.
Why does the title update take longer than the loan payoff?
The loan payoff closes your old loan. The title update changes the lienholder on your vehicle title so your new lender appears correctly. Depending on your state, the title update may take longer because some states require DMV processing, paper documents, original signatures, or notarized forms.
What should I do if my old loan still isn’t paid off?
Start by checking your old lender account, your new lender account, and any refinance portal you use. Look for missing documents, unsigned forms, recent payments, or title steps that need action. If your payment due date is close, consider making the payment to stay current. Then, contact your refinance provider or new lender to ask whether they sent the payoff.
