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4 minutes read. Published January 04, 2023

Written by Allison Martin Written by

Allison Martin’s work began over 10 years prior to that as a digital content strategist. She’s been published in several leading financial publications such as The Wall Street Journal, MSN Money, MoneyTalksNews , Investopedia, Experian and

Editor: Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate from late 2021. They are dedicated to helping their readers to take control of their finances by providing concise, well-studied and well-informed data that turns otherwise complicated subjects into digestible pieces.

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You’ve refinanced your car a short time ago in order to obtain a or more affordable monthly installment, but now you’re curious to know the frequency you can refinance your vehicle if you find a better rate. Perhaps you’re thinking about an initial refinance , and are wondering if you’ll be able to refinance in the future. Either way, it could be a wise financial decision. However, you must be aware of the advantages and disadvantages of refinancing as well as conditions to refinance prior to proceeding. There are many alternatives that don’t require refinancing are more viable. How many times you can refinance a vehicle? If you’ve already refinanced, you can do it again. In fact, there’s no legal limit to the number of times you can refinance if it’s possible to find a lender willing to assist in the transaction. “Vehicle refinancing is not limited by the value and age of your vehicle” says Christina Naylor Chief Operations Officer at Carolina Trust Federal Credit Union. However, after refinancing several times, you may be more difficult to get a new auto loan with competitive terms. Some lenders assess steeper as the likelihood of default is greater. “The issue is why do they continue refinancing?” Naylor says. “Are they using their equity or cash to pay off revolving debt and then immediately running up the credit card balances again? This is a risk to the lender and is a poor strategy for the borrower.” When can you refinance a vehicle? There’s no legal requirement requiring the time frame to refinance. If the lender will consider refinancing your loan shortly after it’s been funded it could be luck. But, it could not be the best financial choice, particularly when you’re thinking about a refinance in a time where the depreciation percentage has reached its peak early in the life of your car. The reasons why you shouldn’t want to refinance more than once However , there are times when refinancing more than once isn’t sensible. You may face a prepayment penalty. Your current lender may charge you for paying the loan off early. Fees add up. There are also loan creation and title transfer charges that are common to refinancing transactions. These costs can add up after several refinances, along with the interest you may pay if you decide to extend the loan term. You may be liable for more than your car is worth. One of the most important aspects to consider when refinancing multiple times is how it affects depreciation. In general, refinancing more than once can cause you to be liable for more than what the vehicle is worth that is described as . This is a problem when you wish to trade or after you’ve paid it off, or if your vehicle is non-functional. It could damage the credit rating. Credit inquiries linger on your credit report for upto two years, but they only affect your score for a period of 12 months. If you are able to refinance more than once within an extremely short time, the additional inquiries may have a slight impact . Refinancing conditions Lenders generally have requirements you need to follow for refinancing your car, including: Age The majority of lenders will require that your car be at least 10 years old. old. However, if you’re refinancing for the third, a second or even a fourth time, your car’s age could be over the threshold which means it is not eligible for refinancing. Value: The car should have a value that is not less than you are obligated to pay for the loan. It is easy to go upside down in your auto loan if you refinance more than once, making this requirement problematic for some borrowers. Mileage Limits for vehicle mileage to 150,000 or 100,000 miles on refinances. If you’ve owned the car for some time, you may have accrued more miles than lenders will allow. How do I make sure I am getting the best rate when I refinance my vehicle loan? Refinancing your car could mean significant savings, therefore it’s important to shop around to ensure you’re getting the most competitive rate. The first step is to take a look at your current auto loan. Review the loan terms, including your interest rates and loan length. Also, look at your credit score to determine whether it’s better than it was before you made your application for the current loan. It might be a good idea to consolidate your loan with an institution like a credit union or bank that you already have an account. This could increase your chances of approval and you may be able to get lower rates due to your connection with your lender. It is also important to look at the rates and terms of different lenders, like banks, as well as online lenders. If possible, prior to submitting a full application. This will help you evaluate loan options and increase your chances of getting approval. Once you’ve narrowed the options make use of an online tool to compare the loan deals. Pay close attention to any penalties or charges for prepayment. Make sure the savings outweigh any costs that are associated with refinancing. How to reduce your monthly payments If you want to but find that refinancing isn’t the right fit, consider these alternatives Change your loan. Call your lender and request to speak to someone from the department of loss mitigation to . Inform the representative that you’re facing financial difficulties and discuss options to make your car loan more affordable and prevent repossession. Swap your car for an alternative that is less expensive. Explore the inventory at local dealerships and create a an inventory of cars with low prices and monthly payments that won’t overstretch your budget. Reduce your choices by visiting the dealership. agree on a deal that will get you a fair price as well as the vehicle you buy. Sell your vehicle privately. You may get top dollar for your vehicle by doing it yourself. When the transaction is concluded then use the money to finance a downpayment for a used or new car. Keep in mind that the current car shortage has , so it may take some time to find the right vehicle with a reasonable price. The next step is to determine if your credit score has improved since you obtained your vehicle loan or you have already refinanced before and want better loan terms and a lower monthly payment, you can try refinancing again. However, before moving forward be sure the benefits are greater than the cost. Also, research lenders to find the best offers to make the most of your dollars. In the event that you don’t, consider changing your existing loan to obtain the best deal, in the event that refinancing isn’t financially sense. It is also possible to trade your car in or trade it in privately if refinancing isn’t your ideal choice for you. Find out more


Written by

Allison Martin’s work began over 10 years ago as a digital media strategist, and she’s since been published in several leading financial publications, including The Wall Street Journal, MSN Money, MoneyTalksNews , Investopedia, Experian and

The edit was done by Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate since late 2021. They are committed to helping readers gain the confidence to control their finances by providing clear, well-researched facts that break down complex topics into manageable bites.

Auto loans editor

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