If you just purchased a car, you may wonder when you will be able to refinance your auto loan to either decrease your interest rate or your monthly payment. To give it the most literal interpretation possible, you can refinance a car loan as soon as you locate a lender willing to approve the new loan.

Some financial lenders will re-refinance a car loan once it has been open for at least six months. After you've acquired a car, there is no predetermined waiting time to meet with other lenders. However, they can only refinance once your existing lender obtains the title of the vehicle, which might take several months, depending on whether it comes from the original owner or the manufacturer. The following are some broad recommendations for whether can you refinance a car loan.

Within The First Sixty To Ninety Days of the Car Loan

Transferring the title of your car from the original owner or manufacturer to your current lender may take anywhere from two to three months on average. Most lenders won't consider your application to refinance the title if the title still needs to be transferred. However, waiting may provide a chance to pre-qualify with more than one refinancing lender and evaluate the rates offered by each.

Because you requested a hard inquiry on your credit record when you first applied for the loan, your credit score may have decreased momentarily. Because of this decline, the interest rate applied to your new loan can be greater. If you still need strong or exceptional credit (a FICO score of 690 or above), it is in your best interest to wait until your credit score has recovered before making major purchases.

At A Minimum of Six Months into the Car Loan

If you wait at least six months into the term of your loan, your credit score will have more time to recover from any brief reductions that may have occurred. Waiting until your credit score improves to the point where you can qualify for a lower interest rate than the one you are now paying makes sense if your objective is to reduce the interest rate and the monthly payment.

You shouldn't refinance a car loan for at least a year if this is your first time borrowing money for an automobile or having credit problems. This way, you'll have plenty of opportunities to establish a solid track record of making payments on time. Before accepting an application for refinancing, some lenders need six to twelve months, during which all payments have been made on time.

More Than Two Years Are Still Left On the Car Loan

If you want to get the most out of your car refinancing, you should have at least two years left on a loan for your vehicle. Because the majority of the interest on a loan is paid at the beginning of the term, refinancing the loan too late in the term will result in smaller potential savings.

Additionally, most lenders have to refinance criteria that kick in at a later stage of the loan process. These may vary from lender to lender but often include the number of months left on your loan term, the amount of the loan debt that has not been paid off the age of the car, and the number of miles it has been driven. When applying to different lenders, make it a point to inquire about the unique restrictions they have for refinancing.

Should You Refinance?

It does not matter when you decide to refinance your mortgage; you should always take the time to submit your application to several different lenders so that you may get numerous quotes. You may determine whether or not to refinance your existing vehicle loan by comparing the terms of the new loan to the old loan. Use the car loan refinancing calculator we've provided below to compare different loan providers. When you find yourself in one of these scenarios, you should strongly consider refinancing your vehicle loan:

• Since you started making payments on your car loan, your credit score has gone up.
• Since you took out the loan for the vehicle, the interest rates for car loans have fallen.
• You went to a dealership and got a loan, but the interest rate was greater than the one you could get with a different lender.
• You need help coming up with the money for the monthly payment. If you refinance to a loan with a longer term, you can lower your monthly payment amount, but you could wind up paying more interest throughout the loan's lifetime.