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Can I refinance my car loan?

I'm making less money than I used to and I want to save wherever I can. Is refinancing my car loan an option?

Jim Donaher · Updated on Mar 12, 2021

Reviewed by Shannon Martin, Licensed Insurance Agent.

Yes, many lenders offer loan programs that allow borrowers to take out a second auto loan to replace their first one. This refinancing process enables borrowers to benefit from lower interest rates and improvements to their credit score.

For example, let’s say you bought your car two years ago when interest rates were high. And they were even higher for you because you had some unfavorable reports on your credit history.

Since then, you have made 24 straight on-time payments, improving your credit score. And interest rates have declined significantly as well. This means you can save substantial money by refinancing your loan.

If you decide to do this, the application process is simple, taking as little as 15 minutes online on many lenders’ websites. As is often the case with auto lenders, decisions are usually made quickly, allowing the borrower to replace their old loan and start saving money.

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