There are no limits on the number of times you can refinance your auto loan—but there are certain expectations and requirements you must meet before you can do so.

When you refinance a car loan, you replace the existing contract with a new one with different terms and conditions. This could mean better interest rates or a longer term. It can be useful to refinance when you’re faced with a new loan that saves you more money.

Even if you think you’re saving money, sometimes refinancing multiple times can impact your credit score or end up making you pay more in the long run—so be sure to do your research before you make any decisions!

While refinancing your auto loans can be a complicated process, finding affordable

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Continue reading to learn more about auto loan refinancing.

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How to refinance your car loan

The first step to refinancing your car should always be researching lenders and the auto plans they are offering.

Your current lender may or may not offer to refinance your loan. Be sure to also check with your bank or credit union—if you have a good relationship with either of them, your chances of getting your refinancing approved will be greater.

In order to get the widest scope of savings possible, make sure to get as many offers as you can!

Some common requirements for refinancing a

car loan

include:

Vehicle has less than 100,000 miles.

Vehicle is less than 10 years old.

Your auto loan is at least a year old.

You’re up-to-date on monthly payments.

You have a good credit score (or it has improved since you initially took out the loan).

Key Takeaway Make sure to contact your bank or credit union before attempting to refinance your loan.

MORE: Does refinancing a car hurt your credit score?

When should you refinance your car loan?

You should only refinance as often as it saves you money. So this usually means not every month or even every few months.

Aim to refinance when you have a financial accomplishment or success, or if you experience some sort of financial setback.

You technically can refinance immediately after you get your car, but we don’t recommend attempting it. It can take a few weeks after you purchase your car for your title and paperwork to go through, so trying to refinance might just complicate things.

How many times can you refinance a car?

There are no legal limits to how many times you can refinance your car.

But repeatedly refinancing your car can end up hurting your future loan applications. Lenders can deny you for a multitude of reasons, such as if you have a poor credit history or if you don’t meet some (or any) of their requirements.

Some lenders will deny an application if they see you’ve refinanced multiple times. This can lead them to see you as an untrustworthy borrower, and they won’t want to take the risk of approving you for refinancing.

Key Takeaway There are no limits on how many times you can refinance your car, but repeatedly doing so can hurt your future loan applications.

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Pros and cons of refinancing multiple times

There are a few

pros and cons of car loan refinancing

you should keep in mind if you are considering refinancing more than once.

Pros

You will (hopefully) end up paying less interest.

Your monthly payments will be lower.

You can extend the term of your loan, giving you more time to pay it off.

Cons

You’ll have to pay a title fee when taking out a new loan.

Lenders may charge additional fees for refinancing.

If you wait longer than the standard 14-day window in which you can apply to multiple lenders and it’s considered a single credit inquiry, then your credit score can drop.

You risk owing more than what your car is worth and becoming “upside-down” on your loan.

Extending your car loan can lead to you paying more in the long run.

MORE:

How to reduce car payments without refinancing your car loan

How to save money with Jerry

If you’re looking for a guaranteed way to

save money on car expenses

, but don’t want to worry about the risks that may come with refinancing multiple times, then

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Choose from competitive quotes from 50+ top insurance companies and Jerry takes care of the rest—securing your new policy and helping you cancel your old one.

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MORE:

How to get out of an upside-down car loan

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FAQs

Can I refinance my loan if I have bad credit?

While it’s still possible to refinance your loan if your credit is poor, it will be far more difficult.

If you do have bad credit, getting a copy of your credit report is your first step to improving it.

You might want to consider adding a cosigner, connect with a lender that is more forgiving, or even trade-in your car if you are unable to refinance and are struggling to make payments.

What’s the difference between refinancing and consolidating my loan?

Refinancing means replacing your existing loan with a completely new one (that, ideally, is a better deal).

Consolidating, on the other hand, means you take out a new loan to pay off two or more of your existing loans.

Loan consolidation can make it easier to keep track of your payment day(s), and having more consistent payments can help gradually improve your credit score as well.

Be sure to do your own research before deciding which of the two options will suit your needs better.

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