7 Best Auto Refinancing Companies of January 2022 | Personal finance
When can I refinance my car?
You should refinance an auto loan if it saves you money, when you have a good credit score, or when your score has improved. Refinancing your car loan with better credit can earn you better interest rates and help you negotiate a shorter loan term.
You shouldn’t consider refinancing your car loan if you are financially stressed or if your loan value is under water, which means the loan is worth more than your car. This type of loan will impact your loan-to-value ratio and significantly reduce the chances of obtaining favorable loan terms for refinancing.
Can I get a loan with bad credit?
You can get a car loan with bad credit, but it will be more difficult. Lenders use credit scores to gauge a borrower’s risk, so the best auto refinance rates tend to go to those with good to excellent credit. People with poor credit will have higher rates than those with good or excellent credit score. Some lenders specialize in lending to customers with medium to low credit, such as MyAutoLoan.com and Auto Credit Express.
How often can you refinance a car?
Legally, you can refinance a car as many times as you want if you find a lender who is willing to give you a new loan. Auto lenders may be apprehensive about refinancing if they see multiple past refinancings on your vehicle and even if you get approved there are other financial risks to consider. Repeated refinancing and loan term extensions increase the risk that your loan will be “turned upside down”. You can also end up paying more than the original loan amount, just in interest rate.