Can You Refinance A Car Twice?

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There are a lot of reasons & benefits to refinancing an auto loan. But did you even know that you could potentially refinance your vehicle a second time? Many financial institutions don’t offer this service, but if Call Federal members will experience savings and added financial flexibility from such a solution, then it’s one we’re happy to provide.

Let’s explore a few reasons why you might consider refinancing your vehicle loan a second time.

Reasons That A Second Refinance Makes Sense

Better Terms

The most common reason why someone may want to refinance their loan is to change the terms (like interest rate, monthly payment or loan length) to better fit their financial goals. Has your credit score improved since your last refinance and you seek the better rate that you deserve? Maybe your income has increased and you’re willing to pay a little more to own your car outright sooner. As your situation changes, another refinance could make sense to realign your loan with your goals.

Add or Remove A Co-Borrower

Over the course of a loan term, life happens and there are a few scenarios that may arise to justify an additional refinance. Is there a joint borrower that is no longer needed on the loan? To become a single borrower, refinancing your loan is the best way to achieve this goal for you and easily accomplished with a new application and a few signatures. Alternatively, you may have gotten married and want to share the responsibility for your vehicle and take advantage of potentially better terms through your combined credit. A second refinance can take care of that, too.

Change Lending Providers

Are you not happy with your current loan or lending provider? Refinancing can not only bring your loan to a new lender, but has the potential of saving you some extra cash in the process.

Things to Consider

Those are just a few instances where a second refinance could be beneficial. Like any financial decision, it’s important to weigh those “pros” and against possible “cons” before applying. Here are a few things you’ll want to know or discuss with your lender.

Impact on Your Credit Report

In most cases, applying for a refinance will appear as an “inquiry” on your credit report. This may have little impact in the long run, but with the way that credit bureaus collect their data, a refinanced loan may appear a new line of credit while your previous loan has yet to be reported as paid and closed, causing your credit score to dip. If you are pursuing a significant financial milestone, like buying a home, be sure to discuss a refinance (or any credit-related transactions) with your mortgage loan officer.

Increased Payments

Paying off your loan faster is a common goal when refinancing. But sometimes a lower rate won’t do the job all by itself. Shorter loan terms often carry larger monthly payments to help you achieve your quicker payoff goal. Consider what your current monthly payment and calculate the max that you are comfortable with and be sure to discuss this with your lender prior to closing on your refinance.

Equity is Everything

We easily could have started here and perhaps we should have, but since refinancing your loan is basically a fresh start on a new loan, you simply must know what your vehicle is worth before seeking an additional refinance. A situation where you have negative equity or get “upside down”, where you owe more than the value of your car, can cause financial heartache down the road. This “loan-to-value” (or LTV for short) ratio in one of the vital numbers that will affect selling your vehicle in the future as well as qualifying for the refinance itself.


Hopefully, this post has not only informed you that second refinances are possible, but also identified some pros and cons that you can weigh to determine if such a solution makes sense for your financial situation. If the answer is yes, we’re ready to help you get the rest of the way. Stop by your favorite branch location, give us a call at 804-274-1200, or visit our vehicle loans page to apply online today.

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