When can I refinance my car?
You should refinance a car loan if it saves you money, if you have a good credit rating, or if your rating has improved. Refinancing your car loan with better credit can earn you better interest rates and help you negotiate a shorter loan term.
You shouldn’t consider refinancing your car loan if you are financially stressed or if your loan value is under water, which means the loan is worth more than your car. This type of loan will impact your loan-to-value ratio and significantly reduce the chances of obtaining favorable loan terms for refinancing.
Can I get a loan with bad credit?
You can get a car loan with bad credit, but it will be more difficult. Lenders use credit scores to gauge a borrower’s risk, so the best auto refinance rates tend to go to those with good to excellent credit. People with poor credit will have higher rates than those with good or excellent credit. Some lenders specialize in loans for customers with average to poor credit, such as MyAutoLoan.com and Auto Credit Express.
How often can you refinance a car?
Legally, you can refinance a car as many times as you want if you find a lender who is willing to give you a new loan. Auto lenders may be apprehensive about refinancing if they see multiple past refinancings on your vehicle and even if you get approved there are other financial risks to consider. Repeated refinancing and loan term extensions increase the risk that your loan will be “turned upside down”. You can also end up paying more than the original loan amount, just in interest rate.