How long after getting a car loan can you refinance?

Roman Danaev

11 July 2023

Refinancing your car loan can be a smart financial move, but timing is essential. To get the most out of the process, it's generally recommended to wait at least 60-90 days after getting your initial car loan. This waiting period allows your credit score to stabilize and gives the lender a chance to establish a payment history.

Your first 60-90 Days

During the first 60-90 days of your car loan, it's best to focus on making timely payments and improving your credit score. Lenders often prefer borrowers with a solid repayment history, and waiting a bit before refinancing can work in your favour. Be patient and use this time to maintain a positive credit profile.

Your first 6 months

Once you've had your car loan for around six months, you might have built up some equity in your vehicle. Equity is the difference between your car's value and the outstanding loan amount. If your car's value has increased or you've paid off a substantial portion of your loan, refinancing at this stage could lead to better interest rates and loan terms.

The last 2 years of your loan

When you have approximately two or more years left on your car loan, it's an opportune time to explore refinancing options. By refinancing at this point, you increase your chances of securing lower interest rates or adjusting your loan terms to better suit your financial goals. Lower interest rates can result in significant savings over the life of the loan, while extending the loan term can reduce your monthly payments.

Is it a good idea to refinance my car loan?

Deciding whether to refinance your car loan is a personal choice that depends on various factors. If you find yourself struggling with high-interest rates or unaffordable monthly payments, refinancing might be a good option. It can potentially save you money and provide some financial breathing room. However, consider the following points before making a decision:

  1. Current Interest Rates: Compare the interest rates offered by various lenders to ensure that refinancing will indeed lead to savings. A lower interest rate can significantly reduce your overall loan cost.
  2. Loan Term: Assess how the new loan term will impact your monthly payments. While extending the loan term can lower your monthly payments, it may result in higher overall interest payments.
  3. Fees and Charges: Be aware of any fees associated with refinancing, such as application fees or early repayment penalties. These costs can influence the overall cost-effectiveness of refinancing.
  4. Length of Ownership: Consider how long you plan to keep the car. If you anticipate selling or trading in the vehicle soon, refinancing might not be the best option.
  5. Credit Score: Your credit score plays a crucial role in determining your eligibility for better loan terms. If your credit score has improved since taking out the initial loan, you may qualify for more favourable refinancing options.

It's essential to weigh the costs, benefits, and potential fees associated with refinancing. Consulting with a car finance broker or financial advisor can help you make an informed decision tailored to your unique situation.


Refinancing your car loan can be a valuable tool in managing your finances and improving your loan terms. By understanding when it's best to consider refinancing and how it can benefit you, you'll be better equipped to make the right decision. Remember, each situation is different, so take the time to assess your needs and seek professional advice if needed. Happy car financing!

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