You where at the car dealership and you got finance to buy a new or used car and you suddenly discover that you’re paying an interest rate that is much higher than it should be. Or maybe you found that you can’t afford the monthly payments.

One option may be to refinance your auto loan at a lower rate and, if need be, for a longer term, which could save you money and reduce the amount of your payment, though it may add to your debt load by extending the length of your loan.

But the questions remains, how long do I have to wait before refinancing my car?

The bottom line is that, while there is nothing to stop you from trying to refinance at any time, it is generally better to wait at least a short period of time.

  • Wait at least 60-90 days from getting your original loan to refinance. It typically takes this long for the title on your vehicle to transfer properly, a process that will need to be completed before any lender will consider your application. Refinancing this early typically only works out for those with great credit.
  • Consider refinancing after six months. If you have fair to great credit, you will begin to have refinancing options after this length of time.
  • If you are a first-time car loan borrower, wait at least a year to refinance your loan. A first-time borrower typically needs to build up a good car loan payment history before refinancing.

Reasons to refinance your car loan?

  • You got a bad deal on your current loan
  • Your credit score has improved
  • You can’t afford your car loan payments.

No matter how new your car loan, consider refinancing if the interest rate you’re paying is too high or if your financial situation has changed.