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How Many Times Can I Refinance My Car?

Finance | 12/29/2021 23:00

If you have already refinanced your car, you may be wondering if you can refinance again. What if your timing wasn’t great the first time around? What if your credit score has improved a lot and you’re certain you can get a better rate this time around? Don’t fret – we’re here to answer all of your refinancing questions.

(Thinking about refinancing for the first time? Take a look at these 3 great reasons to refinance.)

Let’s look at how many times you can refinance your car and what you should think about when refinancing.

Can I refinance my car more than once?

Yes! There is no limit to the amount of times that you refinance your car. That being said, there are a few questions you should ask yourself.

  • Do I qualify for refinancing?

  • When did I last refinance?

  • How will refinancing affect my credit?

  • How do I know the time is right to refinance?

In this article, we will look at all these questions and help you decide if refinancing is the right move for you.

Do I qualify for refinancing?

First things first, are you eligible to refinance again? Most lenders have general requirements for refinancing a loan. Here are a few things that lenders look at:

  • How old your car is

  • How many miles your car has

  • How much money is left on your loan

Most lenders require that your car is less than ten years old and has less than 100,000 miles on it. Refinancing tends to get more difficult as the car ages and depreciates more. If you are wondering if you are eligible, use our online quote form to find out today!

When did I last refinance my car?

Experts recommend that you have 6-12 on-time payments with your current lender before you refinance. So if you last refinanced three months ago, it’s probably best to wait a few months. Why? Lenders want to see that you will make full and consistent payments on your loan. Proving this with your most recent loan is the best way to show them that you are a good candidate for a new car loan.

How will refinancing multiple times affect my credit?

Refinancing will affect your credit score, so be sure to think about this before you pull the trigger. Refinancing affects two parts of your credit score: credit history length and new credit. Since refinancing is paying off one loan with another new loan, refinancing creates a new credit account. At first, refinancing can negatively affect your credit history length, since it counts as a new credit account, but over time, that affect fades – and, in fact, the refinance can improve your credit score in the long run. When you actually go to refinance, your lender will check your credit, which will likely pop up as a hard inquiry on your credit report (remember, however, that hard inquiries only last a year on your credit score, so that will only be a temporary ding).

If you refinance with Auto Approve, we'll help you find the best rate for you – and don't worry, getting started doesn't require a credit check. (Click here to find out why Auto Approve is the best way to refinance!)

How do I know if the time is right to refinance?

You know that you qualify for refinancing and you know that you have waited long enough to refinance. So what else should you think about before refinancing again?

How much time is left on my loan?

Before refinancing, think about how much time is left on your current loan. If you still have a good amount of time left on your loan and you don’t have a good interest rate, refinancing can save you a lot of money. The sooner you switch to a lower APR, the sooner you will start saving. 

If you don’t have a lot of time left in your loan (say less than a year), the fees of refinancing might outweigh the saved interest. Make sure you do the math and figure out what your potential savings could be with refinancing. Auto Approve can help show you how much money you can save, just head over to our quote page to get started!

Are there prepayment penalties on my current loan?

If your loan has prepayment penalties, this may deter you from refinancing. It’s important to read the fine print and determine what the fees are. In some cases, the savings from refinancing might still outweigh any prepayment penalties. If you are unsure of what your prepayment penalties are, call your current lender and have them walk you through it. Be thorough to avoid any surprise fees.

Is my credit score good?

If your credit score has improved since the last time you refinanced, it’s definitely a good time to think about refinancing again. Improving your credit score by even a little bit can score you a much better APR from lenders, which means you can save hundreds, even thousands, every year. Your credit score improves as you make consistent payments, as you pay down debts, and as your accounts age. Check your FICO credit score to see where you stand (you can do this for free three times per year).

Are interest rates good?

Make sure to consider interest rates in general. When interest rates are low (like right now) you want to strike while the iron is hot. The future is always uncertain, so when you see low APRs, you want to take advantage while you can.

Do I need a little breathing room in my finances?

If things are a little tight every month, refinancing might be the answer to your prayers. Securing a lower APR and changing your payment schedule (say lengthening it from 24 months to 36 months) can reduce your monthly bill drastically. Refinancing is a fantastic way to free up room in your monthly budget.

On the flipside, if you have some extra breathing room in your monthly budget, refinancing can help you save money in two ways. First, you can lower your APR so you are saving money on interest. You can also shorten your repayment period so that you are paying that interest over less time. This can save you a whole lot of money in the long run (and the short run!).

There is no limit on how many times you can refinance, so you should refinance as often as it makes sense for you.

Refinancing is a great option for many reasons. The biggest reason is simple: it can save you a lot of money. At Auto Approve, we offer the lowest rates with no markup, and with an A+ rating from the Better Business Bureau, you know we will work hard to save you money. So, if you're ready to start your refinancing journey, get a quote from Auto Approve today.


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*APR and Fees Disclosure: Auto Approve works to find you the best Annual Percentage Rate (APR), which is based on factors like your credit history, vehicle and desired payment terms. Fees to complete your loan refinance vary by state and lender; they generally include admin fees, doc fees, DMV and title. Advertised 6.24% APR based on: 2019 model year or newer vehicle, 730 minimum FICO credit score, and loan term up to 72 months. All loans subject to credit and lender approval.
Auto Approve has an A+ rating with the BBB and is located at 2860 Vicksburg Lane North Plymouth, MN 55447. Auto Approve works to find its customers the best terms and APR, which are based on factors like credit history, vehicle, and desired payment terms. Loan amounts, costs, and fees vary by state and lender; they generally include admin fees, doc fees, DMV, and title fees, depending on the lender and period of repayment. There is no fee to obtain a quote and all refinancing-related costs are included in the amount financed so there are no out-of-pocket costs! For more information, please go to AutoApprove.com.