You found the car, truck, or SUV that suits you. You financed the purchase with a loan that has a monthly payment to fit your budget as well, but you have that nagging feeling that there could still be a better deal out there for an even lower payment amount or in getting that purchase paid off. If this is you, it may be time to consider refinancing your auto loan. 

There are many excellent reasons to refinance, and you will be pleased to know that doing so is not all that difficult. Some of the best reasons to refinance are:

•    Interest rates have gone down significantly from when you took out your original loan
•    You need a change of terms, whether shorter or longer, to pay off your vehicle
•    Your credit score has improved significantly enough to qualify you for a better interest rate

If you think your situation includes one or more of these reasons, then now would be a good time to consider refinancing an auto loan. Before you jump to our online loan application, read on for answers to some of the most common questions about auto loan refinancing.

Can You Refinance an Existing Auto Loan?

Yes! Getting an auto refinance loan is basically the same as any other loan. The general criteria remain useful for deciding if you are likely to qualify for a new loan. The key components are your credit score, your debt-to-income ratio, and your current income. If you have made changes that have raised your credit score or your income has increased, you might be in good shape to substantially improve the interest rate you are offered. You will want to make sure that the vehicle you are looking to refinance has not suffered damage or passed the age at which your potential lender will consider for financing. Many lenders use 10 years as the cutoff for refinancing, but feel free to check in with one of our lending specialists to see if your older vehicle may qualify. 

How Does Refinancing an Auto Loan Work? 

Basically, a refinance auto loan pays off your current auto loan and moves the financing of your vehicle to a new loan, usually at a different lender. Many who qualify for a lower rate use the refinanced auto loan to lower their monthly payment, while others compare new financing opportunities and current vehicle loan rates before choosing the best option. When you are considering refinancing, the rate you are offered is a big factor, but there are a handful of other things to look out for. Fees are the chief impediment to getting the best deal in the long run. If your current loan has a fee for early payoff, it might eat into the savings you would hope to see from a lower interest rate. Other fees to watch for are transaction or processing fees accompanying the new loan. Use a loan calculator to clarify just how all of the factors may affect your situation: interest rate, fees, change in loan term, would affect your budget, your total payoff amount, and the total amount you will pay in interest. 

How Soon Can You Refinance a Car after You Buy It?

When you financed your car initially, the title was sent to the lender. In some states, you will get the paper title with the lender listed as lienholder. If you bought it less than 90 days ago, neither you nor the lender may have received the title yet, and that is the baseline for starting a refinancing process. It is generally thought a good idea to wait for at least 6 months after your original loan, as that will also give time for your credit score to rebound after the usual dip that occurs when you take out a new loan.

Another time factor to consider is not how soon, but how late can you refinance. If you have fewer than 24 months left on your loan, you will want to be certain that the amount of interest you will save is worth the time you put into the process to refinance.