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Can I Refinance My Car With The Same Lender?

Last updated 10/01/2023 by

Justin Smith

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You can refinance your car loan with the same lender. Refinancing can be a worthwhile option if you’re having difficulty making your monthly payments, have a desire to change your loan term, or if your vehicle is approaching age or mileage restrictions. By refinancing with the same lender, you can continue the relationship you’ve already established and save yourself the potential headache of having to look for a new one.
Refinancing your auto loan can be a scary or intimidating process, especially after you’ve already been through it once. However, if you feel your loan is too expensive or you can no longer make the monthly payments, it’s a viable option. Refinancing can be your ticket to better overall financial health.
Fortunately, you have a couple of options to choose from if you want to refinance. You can refinance your car loan with your existing lender and continue the relationship you already have. However, you can also refinance with a different lender, such as a bank or credit union, and shop around for the best loan terms.
Whatever you choose, there are positives and negatives to refinancing. In addition to these risks and benefits, it’s important to know the consequences it will have on your credit score and interest rates before making a decision.

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What does it mean to refinance your car?

Refinancing your car means that you are replacing your current auto loan with a new one. The new loan pays off your original loan, and you then begin to make monthly payments on the new loan. Choosing to refinance your car could potentially save you money by lowering your monthly car payment or decreasing the amount of interest you pay.

Why should you refinance your car?

Refinancing your car loan can come with both positives and negatives, but there are some situational aspects to consider that might help you make a decision.
  • Difficulty making monthly payments. If you’re in a difficult financial situation that has rendered you unable to make the monthly payments on your auto loan, you might think about refinancing to get a lower monthly payment. Even if your income or credit score doesn’t qualify for a lower interest rate, you could potentially work with your lender to modify your loan term to reduce how much you owe each month.
  • Desire to change your loan term. Refinancing your car loan to extend your loan term can help reduce your loan payment. You can refinance to either extend or shorten your loan term, which can reduce your payments and get your car paid off faster. This option can be worthwhile to consider if you have excess cash flow and want to pay off your car sooner but have an existing car loan that comes with prepayment penalties.
It’s important to note that a longer loan term will typically come with a higher interest rate, which means that you will pay more on the loan over its lifetime.

Pro Tip

Keep in mind that the majority of lenders have age or mileage restrictions on auto loan refinancing. Lenders typically won’t refinance vehicles that are over seven to ten years old with more than 100,000 miles on them. If you are approaching either of those limits, you might have difficulty refinancing your loan.

When should you refinance your car?

You can refinance your car loan at any time as long as you qualify. Ideally, you’d do this once your credit score has increased from what it was when you applied for the original.
You’ll also want to make sure you don’t have any negative equity in your car. Equity is when your car is worth more than what you owe on the loan. You typically can’t qualify if your equity is negative.
Additionally, in order to qualify, the amount of the loan you’re refinancing has to fall within the new lender’s acceptable limit, and you have to be current on your loan payments. To ensure you get the best deal for your situation, review your potentially new loan terms before signing anything.

Can you refinance your car with the same lender?

You can absolutely refinance your car loan with your same lender. As we’ve covered above, there are a range of reasons you might want to refinance, and keeping your existing lender is certainly a viable option if you don’t want to deal with the hassle that might come with finding a new lender.
However, seeking a new lender can allow you to compare the terms of your existing auto loan against the terms of a refinanced loan that a new lender would provide. This could help you receive lower interest rates, make lower monthly payments, and shorten or lengthen your loan term.
Regardless of who you refinance with, be sure to compare offers from multiple lenders, including online lenders, banks, and credit unions. If you aren’t sure where to start looking, consider some of the options below to refinance your car.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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Pros and cons of refinancing your car

Refinancing your car loan can be a financially prudent decision that comes with several benefits, including a boost to your credit score and lower monthly payments.
However, refinancing your car loan does come with some drawbacks that might not make it worth your while. Although many people who choose to refinance their loans wind up making lower monthly payments, it’s not always guaranteed.
Here is a list of the benefits and the drawbacks to consider.
  • Lower interest rates and monthly payments. One of the most common reasons for refinancing your existing loan is to receive lower interest rates and make lower monthly payments. Interest rates for auto loans are determined by a combination of factors, including your income, credit score, loan amount, and loan term. Since your income and credit score in particular are subject to change over the course of a loan term, you might be eligible to negotiate for lower interest rates.
  • Changing lenders. Sometimes, other lenders might have more beneficial loan terms or might offer a better deal than your current lender. Refinancing your loan gives you the ability to shop around for different lenders, and compare offers so that you secure the most favorable loan terms.
  • Higher interest rates. If you refinance your loan to a longer loan term in an effort to reduce your monthly payment, you might actually end up paying more overall because of the additional months of interest you’ll have to pay. Even a reduced rate may not offset the cost of continuing to pay interest for an additional year or two.
  • Potential fees. Some lenders have a prepayment penalty for paying your loan off early. Additionally, your state may charge fees to re-register your car or transfer the title. There are also some lenders that have application fees, which you’d have to pay if you have to reapply.


Does refinancing hurt your credit?

Refinancing can hurt your credit score when you first get the loan because the lender will typically take a hard pull of your credit report during the underwriting stage. However, it can help in the long run if it helps you avoid missed payments or allows you to get out of debt faster.

Is it better to refinance with the same lender?

The lender you want to refinance your auto loan with is up to you. Working with the same lender can be advantageous because you already have a relationship and won’t have to go through the hassle of looking for a new deal. However, if you feel you are paying too much or aren’t getting a favorable deal, it might be worth it to look for a new lender.

Can I refinance my car with bad credit?

You can refinance your car loan with bad credit. Some lenders will work with you even if your credit score is as low as 500. That said, if you do have bad credit, you likely won’t be getting the most advantageous loan terms, so it might be better to wait until your credit score increases before you try to refinance.

How soon can you refinance a car loan after purchase?

You can refinance a car loan anytime, as long as you have a lender that will approve the new loan. That said, some lenders won’t refinance a car loan until it has been open for six months or more. Additionally, your new lender can’t refinance until your current lender receives the car’s title from the manufacturer or previous owner, which can take several months.

Key Takeaways

  • Refinancing your car loan means that you take on a new loan to pay off your original loan and make monthly payments on the new loan.
  • You should refinance your car loan if you’re struggling to make monthly payments, if you want to change your loan term, or if your vehicle is approaching age or mileage restrictions.
  • You can refinance your car with the same lender. It might be a good option if you don’t want to deal with the hassle that could come with finding a new lender.
  • Benefits of refinancing your auto loan include lower interest rates, lower monthly payments, and the ability to change lenders.
  • The risks of refinancing your auto loan include the potential for higher interest rates if you refinance for a longer loan term and associated fees that can come with changing lenders.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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