VA loans

VA Loan Reader Questions: Refinancing A Vehicle

May 22, 2013

VA Loan Reader Questions: Refinancing A Vehicle


A reader asks, “I have a 2010 Dodge truck at 17 per cent interest. I wanted to see if I could get it refinanced with a VA loan and get a lower interest rate.”

This is one of the misconceptions we run into when discussing VA home loans. The basic answer to the reader question is “no”. VA loans are not available for refinancing auto loans, personal loans or any other type of non-real estate line of credit.

That is because the VA loan program is only set up to handle loans for purchasing or refinancing a home. Borrowers cannot get a personal line of credit as a VA loan, nor can they purchase vehicles or non-real estate type items that could double as a place to live.

Some of the confusion in this area might stem from the fact that the VA does guarantee cash-out refinance loans, where the proceeds from the refinancing (after the original loan amount has been paid in full) can be used for any purpose the VA describes as “acceptable to the lender”.

Cash out refinancing is NOT the same as a personal line of credit–the home being refinanced secures the loan and the borrower only gets cash back, as previously mentioned, once the other financial obligations related to the first loan are satisfied.

Borrowers can also use cash proceeds from this type of refinance loan to pay for discount points and other expenses of the second loan, where permitted by VA loan rules and the financial institution’s policies.

Do you have questions about VA home loans? Ask us in the comments section.

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