Can you refinance a car loan

Our opinions are our own. Here is a list of our partners and here's how we make money. If you recently bought a car, you may wonder when you can refinance your car loan to reduce the interest rate or lower the payment. Strictly speaking, you can refinance your auto loan as soon as you find a lender that will approve the new loan.

Delayed lender approval can be an obstacle to refinancing your car loan, but there are potential benefits to waiting. Here are some general guidelines to help you determine the best time to refinance.

It usually takes at least two to three months for your vehicle title to transfer from the manufacturer or previous owner to your current lender. So waiting will give you the opportunity to apply and be considered by more lenders.

When you applied for the original loan, the hard inquiry on your credit report may have caused a temporary small drop in your credit score. This drop could result in a higher interest rate on your new loan. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories.

But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. While we adhere to strict editorial integrity , this post may contain references to products from our partners. Here's an explanation for how we make money. Founded in , Bankrate has a long track record of helping people make smart financial choices.

All of our content is authored by highly qualified professionals and edited by subject matter experts , who ensure everything we publish is objective, accurate and trustworthy. Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money.

Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.

Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy.

You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. Bankrate follows a strict editorial policy , so you can trust that our content is honest and accurate. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. But a lower monthly payment can sometimes mean more money out of your pocket over the life of your loan.

Here are 6 tips to think about when deciding whether or not to refinance your auto loan. Each bank or lender has specific refinancing requirements, so be sure to ask about the details. Our auto loan refinance calculator will show you whether refinancing can save you money. Does your current lender subject you to a prepayment penalty for paying off your loan early?

If the interest rate you qualify for today is significantly lower than your current loan rate, it may be a good time to refinance a car. Has your credit score changed since your original car loan?

Learn how to improve your credit score. Again, an amortization table can show you how your interest costs add up over time. Extending the life of your loan can also lead to your loan being upside-down. Put another way, you may owe more on your car than it is worth.

Prepayment penalties still exist , and you might have to pay extra if you pay a loan off before the term is up. Penalties can eat up any savings you get from a lower interest rate. If you run the numbers and you determine that it makes sense to refinance, waiting can cost you.

Used car loan rates are typically higher than new car rates. Any late payments will hurt your credit and your ability to refinance. To get a new loan, you need to apply with a new lender. In most cases, the process is relatively painless—your lenders work together to handle the logistics, and you simply need to submit an application. To prepare:. Submit your application, along with any required documentation, and respond to any lender questions. Many lenders can provide an approval decision on the same day you apply, or within a few days.

Any lender with competitive rates and fees is worth a look. Online lenders are another good source. You can take care of everything whenever and wherever it is most convenient, as well as find excellent rates online.

When lenders make inquiries into your credit, your credit scores drop slightly. You may be able to refinance a car loan with bad credit, but if your credit is worse now than it was when you got the original car loan, then refinancing might not benefit you.

A lender is unlikely to give you better terms with a refinance if your credit score has dropped. You can refinance a car loan as many times as you can find a lender willing to refinance it for you. However, repeatedly refinancing within a short time could be seen as a red flag by lenders.