--- title: When to Refinance a Car Loan description: Many car loans are kept with the original lender during the life of the loan but it can be beneficial in some instances to consider an auto loan refinance. image: https://rmcu.net/hubfs/Campaigns/Vehicle%20Loans/iStock-502873578.jpg --- [![RMCULogoColor.jpg](https://rmcu.net/hubfs/RMCU-logo.svg "RMCULogoColor.jpg")](https://rmcu.net) [Online Banking Login](https://banking.rmcu.net/auth/signin) [Online Banking Login](https://banking.rmcu.net/auth/signin) [![RMCULogoColor.jpg](https://rmcu.net/hubfs/RMCU-logo.svg "RMCULogoColor.jpg")](https://rmcu.net) - - [Home Loans](https://rmcu.net/home-loans) - [Personal](https://rmcu.net/personal) - [Business](https://rmcu.net/business) - [Membership](https://rmcu.net/membership) - [Careers](https://rmcu.net/membership/about-rmcu/careers) - [Contact Us](https://rmcu.net/contact-us) - Search - [Financial Education ▾](https://rmcu.net/blog/when-to-refinance-a-car-loan#financial-education-nav) - [About RMCU ▾](https://rmcu.net/blog/when-to-refinance-a-car-loan#about-rmcu-nav) - [Security](https://rmcu.net/membership/security) - [TruStage: Security Alert](https://rmcu.net/trustage-security-alert) - [Money Mastermind](https://rmcu.net/money-mastermind-lessons) - [Financial Counseling](https://rmcu.net/financial-counseling) - [Savvy Money](https://rmcu.net/membership/financial-education/savvy-money) - [Blog](https://rmcu.net/blog) - [Resources](https://rmcu.net/resources) - [RMCU Team](https://rmcu.net/membership/about-rmcu/rmcu-team) - [Member Information](https://rmcu.net/membership/about-rmcu/member-information) - [Annual Meeting](https://rmcu.net/membership/about-rmcu/annual-meeting) - [Community](https://rmcu.net/membership/about-rmcu/community) - [Our History](https://rmcu.net/membership/about-rmcu/history) [back to blog](https://rmcu.net/blog) [Loans](https://rmcu.net/blog/topic/loans) # When to Refinance a Car Loan Read Time **2 mins** | Written by: Rocky Mountain Credit Union [mailto:?subject=When%20to%20Refinance%20a%20Car%20Loan&body=https%3A%2F%2Frmcu.net%2Fblog%2Fwhen-to-refinance-a-car-loan](mailto:?subject=When%20to%20Refinance%20a%20Car%20Loan&body=https%3A%2F%2Frmcu.net%2Fblog%2Fwhen-to-refinance-a-car-loan) ## **When To Refinance** You See a Drop in Interest Rates What goes up, must go down. If you bought a car when interest rates were on the up, chances are rates have come back down. If you notice that other lenders are offering lower interest rates than when you initially financed your loan, it might be a good idea to look into refinancing. This can lower the total amount of interest you are paying on the loan as a whole. Remember that with loans, you pay the most interest at the beginning of the loan. So refinancing earlier in the life of your loan will be in your best interest.   #### You Need a Lower Monthly Payment Life is as much of a roller coaster as the economy and sometimes your financial situation changes suddenly. If you refinance your car loan, it may lower the cost of your monthly payment. This may be through a lower interest rate or extending the loan. Either way, you can save money monthly through a smaller payment.  #### You've Had a Bump Up in Your Credit Score Your credit rate determines your interest rate, whether you want it to or not. If your credit score was a little less than desirable your first time financing your car, you probably ended up with a higher interest rate.  Any growth in your credit score can result in a significant amount of savings on interest throughout the life of the loan as well as the benefits of a lower monthly payment. ## **Things That Can Affect Refinancing a Car** Refinancing your car has loads of benefits. But there are few things that should be considered before you jump into all the refinancing options available.  #### The Value of Your Car A car will depreciate in value, sometimes more quickly than we would like. When preparing a loan for a car, the lender will make sure that what you owe on the car is not more than what it is worth.  This is a high risk scenario to lenders because if something goes wrong, the car doesn't cover the full amount of the loan. Be sure to check the blue book value of your car before contacting a financial institution for refinancing information. #### The Age of the Car Similar to value, the age of your car may be a problem for the lender. Cars that are more than seven years old have a higher risk of incurring problems  that can result in the car becoming unusable without a significant amount of repairs. While the availability of a loan for older cars varies, you will want to know what their limit is on age if you need to refinance an older vehicle. If you are interested in refinancing your current auto loan or just need some information on your options, contact one of the loan professionals at [Rocky Mountain Credit Union](https://www.rmcu.net/contact-us/) today for more information or hop over to our page on the [car buying process](https://rmcu.net/rmcu-auto-loan-basics) for everything related to car buying. ##### Rocky Mountain Credit Union Share the Love [mailto:?subject=When%20to%20Refinance%20a%20Car%20Loan&body=https%3A%2F%2Frmcu.net%2Fblog%2Fwhen-to-refinance-a-car-loan](mailto:?subject=When%20to%20Refinance%20a%20Car%20Loan&body=https%3A%2F%2Frmcu.net%2Fblog%2Fwhen-to-refinance-a-car-loan) You May Like These ## Related Articles ![](https://rmcu.net/hs-fs/hubfs/first-home-2026.jpg?width=700&name=first-home-2026.jpg) Home and Mortgage ### [A First-Time Homebuyer’s Guide to Low Down Payment Options in Montana](https://rmcu.net/blog/first-time-homebuyer-montana) Learn how first-time homebuyers in Montana can navigate down payments and loan options. 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