Yes. “Once a borrower has made about 12 on-time, positive payments, they can potentially qualify for a lower rate and refinance to reduce their overall cost,” says Lindsay Casas, Director, Financial Services at Group 1 Automotive. If your credit has improved or rates have dropped since you financed, it’s worth checking what you’d qualify for now.
Your rate at signing isn’t locked in for good. If your credit tier improves after you’ve financed — or if market rates drop — refinancing can lower your monthly payment or cut the total interest you’ll pay over the life of the loan.
Refinancing is worth a look once you’ve built a track record on the current loan. A history of on-time payments strengthens your case with a new lender, and a stronger credit tier can mean a meaningfully lower APR than what you originally qualified for. It’s also worth comparing offers if general market rates have dropped since you signed, or if you want to shorten your remaining term to pay the car off faster. Before you refinance, weigh any new loan’s fees and term against what you’d actually save in interest, and watch out for extending the term so far that you end up paying more overall even at a lower rate.
Making additional principal payments or switching to a bi-weekly payment schedule are two other ways to cut down what you’ll pay in interest over the life of the loan, without going through a new credit application. Extra principal payments shrink the balance interest accrues against, and a bi-weekly schedule effectively adds one extra full payment a year compared to paying monthly.
