Refinancing your car loan can be a smart financial move, but how often can you do it? The answer might surprise you. At O1ne Mortgage, we understand the intricacies of refinancing and are here to guide you through the process. Call us at 213-732-3074 for any mortgage service needs.

When Should You Refinance Your Car?

Refinancing your car loan can be beneficial in several scenarios:

• Your credit score has improved.
• Market rates have decreased.
• You need a lower monthly payment.
• You have positive equity in the vehicle.
• You’ve had a poor experience with your current lender.

However, it might not make sense to refinance if:

• Your loan includes a hefty prepayment penalty.
• Your credit score has gone down.
• Your vehicle is 10 or more years old or has more than 100,000 miles.
• You have negative equity in the vehicle.
• You took out or refinanced the loan within the last six months.

Does Refinancing a Car Hurt Your Credit?

Each time you apply for a loan, the lender runs a hard inquiry on your credit reports. While a single inquiry won’t impact your credit score significantly, multiple inquiries in a short period can have a compounding negative effect. It’s generally best to wait at least six months between credit applications to avoid too much damage to your credit profile.

Alternatives to Refinancing a Car Loan

Depending on your situation, there may be other options available:

• Replace your car with a less expensive one: If you’re having trouble keeping up with your payments, consider selling it or trading it in for a cheaper model.
• Request a loan modification: If your credit is in poor shape, consider reaching out to your lender and asking for a loan modification.
• Other financing options: Consider a home equity loan, a low-interest personal loan, or an introductory 0% APR credit card.

Check Your Credit Before Applying for an Auto Refinance

Before refinancing your car loan, check your credit score and review your credit report. This will give you a rough idea of your overall credit health and provide insight into the factors influencing your score. Look for opportunities to improve your credit before you apply to refinance your auto loan.

Contact O1ne Mortgage for Expert Mortgage Services

At O1ne Mortgage, we are dedicated to helping you navigate the complexities of refinancing and other mortgage services. Whether you’re looking to refinance your car loan or need expert advice on mortgage options, we’re here to help. Call us today at 213-732-3074 to speak with one of our experienced loan officers.