Best time to refinance a car loan is when you are ready for it and have maximum things ready. In this article, we have tried to cover the topic so that you can find out what is the best time to refinance a car loan.
The first 60 to 90 days of a car loan
Transferring your vehicle title from the manufacturer or previous owner to your current lender usually takes two to three months. Most lenders won’t even consider a refinance application if the title hasn’t been transferred. Waiting, on the other hand, may provide an opportunity to pre-qualify with multiple refinancing lenders and compare rates. In the meantime, you can make a decision if this is the best time to refinance a car loan.
The hard inquiry on your credit report when you applied for the original loan may have caused a temporary drop in your credit score. As a result of the decrease, your new loan may have a higher interest rate. You’ll benefit from waiting for your credit score to recover unless you already have good or excellent credit (a FICO score of 690 or higher and this is the best time to refinance a car loan).
A car loan that has been in place for at least six months
Waiting at least six months after your loan term ends gives your credit score more time to recover from any temporary drops. If you want to lower your interest rate and monthly payment, you should wait until your credit score allows you to qualify for a lower rate than your current one.
If you’re buying a car for the first time or have had credit problems in the past, you should wait at least a year before refinancing because that isn’t the best time to refinance a car loan. You’ll have more time to establish a track record of timely payments. Most lenders will consider a refinancing application after six to twelve months of on-time payments.
The car loan has at least two years left on it.
You should have at least two years left on your auto loan to reap the benefits of auto refinancing. Because most interest is paid at the beginning of a loan term, refinancing too late in the term reduces the amount of money you can save.
In addition, most lenders have refinancing requirements that will come into play later in the loan process. These vary by lender but typically include the number of months left on your loan term, the remaining loan balance, the car’s age, and its mileage. When approaching lenders, be sure to inquire about their refinancing requirements and ask if this is the best time to refinance a car loan or not.

Is it the best time to refinance a car and is it worth it?
It’s a no-brainer if you’re refinancing and know you’ll save money. If you’re unsure if you’ll save money, use our auto refinance calculator to calculate your savings and determine whether refinancing is a good financial decision and this is the best time to refinance a car loan or you should wait for more.
People often refinance because they need to lower their monthly payments, usually due to a financial emergency. Finding a balance between your immediate financial needs and your long-term financial health is never accessible. Still, with the correct math and planning, you can make the best financial decision for yourself and your family.
If you need to refinance your car to improve your cash flow, you can do so right now to get back on track because this is the best time to refinance a car. Start making extra payments on your auto loan to pay it down faster once your finances have stabilized, assuming your new loan has no prepayment penalties. You’ll save money on interest by paying off your car loan sooner.
Suppose you’re not sure whether refinancing your auto loan is the best option. In such a case, you should consult an expert, such as a certified credit counselor from the National Foundation for Credit Counseling (NFCC). It is the nation’s largest nonprofit financial counseling organization, assisting people in taking control of their finances. It can help you determine if refinancing is right for you by providing free or low-cost debt and credit counseling.
Even though an auto loan isn’t eligible for a debt settlement plan, speaking with a credit counselor if you’re having trouble making payments can help. You might not be able to find solutions on your own, so a nonprofit credit counselor could help. Using the NFCC locator, you can find a credit counselor in your area.
Last Thoughts
You should apply with multiple lenders and receive multiple offers regardless of when you refinance a car. You can decide if this is the best time to refinance a car by comparing refinance offers to your current auto insurance loan. You can use the auto insurance loan refinance calculator to compare offers.