Will refinancing my car start my loan over?

Does refinancing your car loan cause the loan to start over? I have a car loan that I've paid on for 27 months, but the interest rate is 18%. I've built my credit score to 753 during that time and my friend told me I should definitely refinance the loan. However, I have my reservations because I don't want to start from scratch.

Answer provided by
Eric Schad
Answered on Jul 13, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
No, refinancing doesn’t necessarily mean that you’re starting your car loan over.
For example, you say you’ve been making payments for 27 months. Let’s say that you started with a 60-month loan, so you’d still have 33 months to pay.
When you refinance the loan, you don’t have to start back at 60 months unless you want to. Most lenders will require a refinancing that’s in 6- or 12-month increments.
So in your case, you’d probably refinance for a 36-month loan. However, you’re more than welcome to take out a 24-month loan or another 60-month loan. The choice is yours.
Don’t think of it as starting over. In many cases, you’ll save tons of money over the life of the loan and can choose a loan term that fits your needs, goals, and financial situation.

You can save money on car insurance, too.

Since you’re looking to refinance your car, you may want to take a look at your insurance rates. You can use a handy tool like the free Jerry app to help you find cheaper car insurance.”

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