How many times can you refinance a car? (2024)

How many times can you refinance a car?

You can refinance a car loan as many times as you want—there's no set limit. That said, refinancing your car loan multiple times can have some negative consequences for your wallet and credit history. Here's what to keep in mind.

Unless you have excellent credit, it's a good idea to wait at least six months before you refinance a car loan. Waiting can keep refinancing from lowering your credit score too much. It's also a good idea to avoid refinancing the same loan multiple times.

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.

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.

There's no legal limit. However, you'll have to find a lender willing to lend you the money. And just because you can refinance your car multiple times doesn't mean it's a good idea for you. To make refinancing your car worthwhile, you should look for a lower interest rate or lower monthly payment.

There are also loan origination and title transfer fees, which are standard with refinancing transactions. These costs and the additional interest you may pay if you extend the loan term can add up after several refinances. You may owe more than the car is worth.

It doesn't always make sense to keep refinancing your home simply because interest rates go down or your credit score goes up. Like your first mortgage, a refinance has closing costs. Each time you refinance, you'll have to pay fees, such as for the application, appraisal, credit check, attorney and title search.

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.

What happens when you refinance a car? When your new, refinanced loan is approved, your new lender will pay off your old loan, and you'll start making loan payments to your new lender. If the lender is the same, they'll retire your old loan and issue a new loan that you'll start making payments on instead.

There are no legal restrictions to paying off your auto loan early but it may come with fees from your auto loan provider. Paying off a car loan early can be a good option to save money and reduce your debt, but whether it is a good idea depends on your unique financial situation.

What is a good interest rate for a car for 72 months?

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.

We understand many people worry that refinancing a car loan puts them in a more restrictive situation. However, you can do everything with your car after refinancing that you could do with it before refinancing. There are no additional restrictions on your car because of refinancing.

The following factors might disqualify your car entirely: Negative equity: If you owe more on your car than it's worth, it can be difficult to find a lender willing to refinance your car. High mileage:Cars with high mileage are more high-risk for lenders and can be difficult to refinance.

You may have to pay some additional interest in addition to the principal. Even worse, some loans, such as loans with precomputed interest, make you pay all of the interest in addition to the principal. You're also likely to incur refinance fees. These can include lien holder and state re-registration fees.

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.

What are the disadvantages of a large down payment? Providing more money down doesn't guarantee a lower interest rate, and it can cut into your savings.

Don't refinance if you have a long break-even period—the number of months to reach the point when you start saving. Refinancing to lower your monthly payment is great unless you're spending more money in the long-run.

Conventional refinance: For conventional refinances (including cash-out refinances), you'll usually need at least 20 percent equity in your home (or an LTV ratio of no more than 80 percent).

A cash-out refinance allows you to refinance your mortgage and borrow money at the same time. You apply for a new mortgage that pays off your existing one (and any liens on your property) and withdraw a portion of your home's equity as a lump sum.

When not to refinance. It might not be smart to refinance for any of these reasons: Save money for a new home: Refinancing isn't free; you'll pay between 2 percent and 5 percent of the loan's principal in closing costs, and it can take a few years to break even.

Can refinancing backfire?

Moving debt around is not the same as paying it off. It can also backfire if you are unable to pay the larger loan balance and risk losing your home. If you're having trouble paying consumer debts, think twice before putting your home on the line.

If interest rates are higher than they were when the former loan originated, it may lead to owing more than you did under the previous loan. Refinancing may involve fees such as origination or document fees and prepayment charges, which can add to the overall amount you owe on the loan.

If you can get a rate under 6% for a used car, this is likely to be considered a good APR.

A 72-month loan for a car is a long-term loan, and long-term loans typically come with higher interest. While long-term loans translate to lower monthly payments, they result in more interest paid over the life of the loan. With that said, an interest rate of around 5% for a 72-month auto loan is considered ideal.

Yes, you can usually refinance your auto loan with the same lender. While some lenders do not allow their borrowers to refinance with them, many do. Just keep in mind that your lender might not agree to refinance your loan if you took it out recently or don't meet their criteria for refinancing.