How Many Times Can I Refinance My Auto Loan?

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Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

, Content Manager - October 1, 2020

There isn’t a limit on how many times you can refinance your auto loan, but there are requirements you need to meet to do so. Your car and your loan may be the things limiting how many times you can actually refinance.

Refinancing an Auto Loan Multiple Times

Refinancing is when you replace a loan contract on your vehicle for a new one with different terms. There’s nothing stopping you from applying for refinancing as many times as you want. However, this doesn’t mean you’re going to get approved every single time you apply.

When you refinance, you need to meet the requirements of the lender. This means that your car loan and your vehicle need to meet some minimum standards, and your credit score does, too.

Despite meeting the requirements, if a lender sees that you’ve already refinanced once or twice, they could simply say no – they may get the impression that you’re in over your head. A borrower that’s refinanced more than once can be viewed as a red flag. On top of that, it may not be in your best interest to refinance more than once anyway.

Reconsidering Refinancing (Again)

The ideal way to refinance is by lowering your interest rate. This actually saves you money on your auto loan, and borrowers whose credit scores have improved since the start of their loans may be able to qualify for lower interest rates.

If you’ve refinanced before, and are thinking about doing it again, odds are you’re looking to lower your car payment even further. Nearly everyone that looks into refinancing is trying to lower their monthly payment by either lowering their interest rate or by extending their loan term.

But just extending your loan doesn't save you any money in the long run. In fact, you’re going to pay more for your loan overall. The longer you owe on an auto loan, the more interest charges you pay. Car loans are almost always simple interest, so interest accrues daily based on the balance of your loan. The slower you pay off the vehicle, the more you pay.

If you keep extending your auto loan to make your payments smaller and smaller, you’ll be paying on the same car for years and could find yourself in a negative equity position, where you owe more on the vehicle than it’s worth. Cars lose value every year, so yours may depreciate too fast to keep up with if your payments are too low.

If you’re in over your head and can’t afford your monthly payment, it may be a better idea to sell the vehicle for something more affordable instead of trying to refinance multiple times to lower it.

Common Requirements for Refinancing a Car Loan

If you’ve already refinanced your auto loan, there’s a chance that you may not qualify for it again (or a third time). Lenders have stipulations for refinancing, and as time goes on, vehicles can lose the ability to qualify.

Here are the common requirements for refinancing a car loan:

  • Vehicle has less than 100,000 miles
  • Car is less than 10 years old
  • The auto loan is at least a year old
  • You’re current on the monthly payments
  • Your credit score is considered good or has improved since the start of the loan
  • Loan can’t big or too small (specifics on acceptable amounts vary by lender)
  • Vehicle can’t have negative equity

Not everyone can refinance all the time, and as time passes, your car may not qualify either. If refinancing doesn’t feel like the right move for you, getting another vehicle might be the next step.

Your Next Move

If you think you can qualify for refinancing, you can fill out our free auto refinancing request form. Our trusted partner will look for a refinancing lender that may be able to work with your credit and car.

But if you don’t think refinancing is in the cards for you, and you can’t afford your vehicle anymore, it may be time to trade it in for another one. However, a lower credit score can make getting into an auto loan difficult – we want to make it a little easier.

Here at CarsDirect, we have a nationwide network of dealerships that are signed up with subprime lenders. To get matched to a dealer in your area with the lending options you need for your credit, fill out our free car loan request form. Get started today!


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, Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

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