How many times can I refinance my car?
There are several reasons to consider refinancing your car loan, but once you've done it, you may wonder whether you can do it again. You can refinance a car loan as many times as you want—there's no set limit.
You can refinance a car as often as you would like to as long as there are no restrictions from your lender. However, we recommend comparing your options carefully before doing so as refinancing too often can cause a drop in your credit score.
Refinancing may lower your credit score a few points, but the impact to your credit score will only be temporary. Applying for a loan generates a hard inquiry. Refinancing may be worth it if rates have dropped since you took out your loan.
Refinancing and extending your loan term can lower your payments and keep more money in your pocket each month — but you may pay more in interest in the long run. On the other hand, refinancing to a lower interest rate at the same or shorter term as you have now will help you pay less overall.
When can I refinance my car after I buy it? After you buy a car, you have to wait at least 60 to 90 days before you can refinance, since it takes about this long to transfer the title to your name. Generally, it's best practice to wait to refinance a car loan for at least six to 12 months.
If you refinance to a longer loan term to reduce your payment, you may actually pay more overall because of the additional months of interest you pay.
There is no limit to how many times you're allowed to refinance your mortgage, though a lender might enforce a waiting period between when you close on a loan and refinance to a new one.
Refinancing is an opportunity to start over with your loan, so take the time to apply with several auto loan refinancing lenders. Once you have all of your offers, you can use our auto loan refinance calculator to compare and find the auto loan that will benefit you the most.
A good interest rate for a car loan is typically below 5.18% for new cars and 6.79% for used vehicles. However, the best rate is unique to the borrower so it's best to look at the average interest rates for your credit score category to know if you're getting a good deal.
The bottom line
You'll start from scratch with a new auto loan when you refinance and potentially get a lower monthly payment or interest rate. But before applying, consider the risks that come with refinancing. Look for other ways to save money if refinancing isn't the best move for your financial situation.
What not to do when refinancing a car?
- Extending the Loan Term Too Long. ...
- Not Shopping Around for the Best Offer. ...
- Not Checking Your Credit Score. ...
- Being Upside Down on Your Loan. ...
- Refinancing Too Early or Too Late in the Term of Your Existing Loan. ...
- Getting Stuck with Penalties from Your Existing Lender.
What is a good interest rate for a 72-month car loan? An interest rate under 5% is a great rate for a 72-month auto loan.

Refinancing also comes with the risk of higher interest rates. If your credit has dipped or interest rates have gone up, you may find interest rates higher than your current one. In the current market, steep interest rates aren't uncommon. Recent Fed rate hikes have driven interest rates up to record highs.
There are no legal restrictions to paying off your auto loan early but it may come with fees from your auto loan provider. Paying off a car loan early can be a good option to save money and reduce your debt, but whether it is a good idea depends on your unique financial situation.
Most lenders require a credit score of 620 to refinance to a conventional loan. FHA loans have a 500 minimum median qualifying credit score. However, most FHA-approved lenders set their own credit limits. Rocket Mortgage® requires a minimum 580 credit score to qualify.
McBride shares that while the high-rate environment will persist, rates will ease for most borrowers in 2024. Increased competition between lenders may help drivers secure a good rate. However, he warns, “don't expect auto loan rates to fall enough to offset the increases we've seen over the past couple of years.”
Competitive Interest Rates on Auto Loans
Credit unions are not-for-profit, so we operate for the benefit of our members, not shareholders. Since we aren't profit-driven, we are able to provide the best possible rates for our members. Our earnings go right back to you in the form of lower loan rates and no hidden fees.
Renegotiate for a longer loan term
Another way to use an auto loan refinance to reduce your monthly payments is to select a longer loan term. Keep in mind, though, that a long loan term will end up costing you more money in the end since you're paying interest for a longer period of time.
It's usually better to make extra payments when:
If you can't lower your existing mortgage rate, a refinance likely won't make sense. In this case, paying extra on your mortgage is a better way to lower your interest costs and pay off the loan faster.
Historically, the rule of thumb is that refinancing is a good idea if you can reduce your interest rate by at least 2%. However, many lenders say 1% savings is enough of an incentive to refinance. Using a mortgage calculator is a good resource to budget some of the costs.
How much equity do I need to refinance?
Conventional refinance: For conventional refinances (including cash-out refinances), you'll usually need at least 20 percent equity in your home (or an LTV ratio of no more than 80 percent).
You pay closing costs when you close on a refinance – just like when you signed on your original loan. You might see appraisal fees, attorney fees and title insurance fees all rolled up into closing costs. Generally, you'll pay about 2% – 6% of your refinance's value in closing costs.
When not to refinance. It might not be smart to refinance for any of these reasons: Save money for a new home: Refinancing isn't free; you'll pay between 2 percent and 5 percent of the loan's principal in closing costs, and it can take a few years to break even.
Moving debt around is not the same as paying it off. It can also backfire if you are unable to pay the larger loan balance and risk losing your home. If you're having trouble paying consumer debts, think twice before putting your home on the line.
You can refinance your mortgage as many times as it makes financial sense to do so. The only caveat is that you might have to wait six months from your most recent closing (whether it was a purchase or previous refinance) to do it again. Also, remember that refinancing includes closing costs.
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