How soon can I refinance my car?
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.
When Can You Refinance Your Vehicle? After purchasing your car, you have to wait for at least 60-90 days to refinance your vehicle because that is the minimum amount of time it takes to transfer the car title into your name. After this period passes, you have the green light to refinance.
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.
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. However, the best loan offers are only available to borrowers who have the best credit scores and payment histories.
However, most financial experts agree that waiting six months before refinancing often will get you the best terms for your situation. It also gives you enough time to improve your credit score and get your financial situation in order.
Can I Refinance My Car Loan with the Same Lender? Many lenders will allow you to refinance your existing car loan. If your credit score has improved substantially since you took out the original loan, your bank will be just as willing as its competitors to give you a better deal.
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.
Depending on the reason you are refinancing in the first place, you could actually pay higher interest costs than what you have on your current loan. For example, if you need more time to pay back the loan and refinance for a longer term, you'll end up paying more in interest – even if the rate is lower.
| Credit score | Average APR, new car | Average APR, used car |
|---|---|---|
| Superprime: 781-850. | 5.61%. | 7.43%. |
| Prime: 661-780. | 6.88%. | 9.33%. |
| Nonprime: 601-660. | 9.29%. | 13.53%. |
| Subprime: 501-600. | 11.86%. | 18.39%. |
Not only can there be fees involved in applying to refinance, but some borrowers may also experience having to pay early termination fees, depending on how their original auto loan is set up.
How do I pay off a 6 year car loan in 3 years?
- Make a full lump sum payment. ...
- Make a partial lump sum payment. ...
- Make extra payments each month. ...
- Make larger payments each month. ...
- Request extra or larger payments to go toward your principal.
In early 2023, average rates for new and used vehicles were 6.58 percent and 11.70 percent, respectively, according to Experian. The third quarter brought similar rates, 7.03 percent for new and 11.35 percent for used.
| Credit Score | New Car Loan | Used Car Loan |
|---|---|---|
| 700-749 | 12.52% | 12.77% |
| 600-699 | 16.86% | 17.11% |
| 451-599 | 22.01% | 22.26% |
| 450 or lower | 23.92% | 24.17% |
- Best Overall: PenFed.
- Best Big Bank: PNC Bank.
- Best Refinance Loan Marketplace: AUTOPAY.
- Best Credit Union: Consumers Credit Union.
- Best Online Lender: LightStream.
- Best for Low Minimum APR: OpenRoad Lending.
| Brand | Loan amount | Term |
|---|---|---|
| Lightstream Car Refi | Up to $100,000 | 24 to 84 months |
| PenFed Car Refinance | Up to $150,000 | 36 to 84 months |
| Bank of American Auto Loans Refi | Up to $100,000 | 12 to 75 months |
| Consumers Credit Union Auto Loan Refi | Up to $150,000 | Up to 96 months |
Most lenders require at least 600. You likely won't get a better rate by refinancing with a score lower than this. It could even cost you more overall, especially if you increase your loan term to reduce your monthly payments. You can check your credit score for free.
Because refinancing involves taking out a new loan with new terms, you're essentially starting over from the beginning. However, you don't have to choose a term based on your original loan's term or the remaining repayment period.
Refinancing your car means replacing your current auto loan with a new one. The new loan pays off your original loan, and you begin making monthly payments on the new loan. The application process for refinancing doesn't take much time, and many lenders can/may make determinations quickly.
There's no legal or lender-based limit to how many times you can refinance a car loan.
According to data from Experian, the average used car rate in the third quarter of 2023 is 11.35 percent. Although refinancing rates vary, they are usually similar to used car rates. Because the Fed rate has increased and rates are rising, it may not be the best time to refinance based on rates alone.
Is 2024 a good year to refinance a car?
For those holding onto loans with higher rates, 2024 could be a good chance to refinance to lower interest rates and a more affordable loan.
Lower fees: Credit unions are also less likely to charge expensive fees. Application and financing fees from big banks can add up and result in a higher monthly payment. Ease of application: You can apply for refinancing through a credit union online or by visiting a bank branch.
Why do I owe more on my car after refinancing? Refinancing may result in owing more over the course of your auto loan if a change in the loan term length, removing a co-borrower, credit score, payment amount, or interest rate contributes to a higher overall cost.
- Review your existing auto loan.
- Determine the value of your car.
- Evaluate your credit.
- Gather information for your application.
- Compare lenders and rates.
- Apply to refinance your car loan.
- Refinance with a new lender. Refinancing can be an easy way to pay off your loan faster. ...
- Make biweekly payments. ...
- Round your payments to the nearest hundred. ...
- Opt out of unnecessary add-ons. ...
- Make a large additional payment. ...
- Pay each month.
