 TITLE: Will Refinancing My Auto Loan Hurt My Credit? CONTENT: When Is It a Good Idea to Refinance a Car Loan?\n-----------------------------------------------\nIt makes sense to refinance a car loan under the following circumstances:\n*   **Your car is holding its resale value.** Before applying to refinance your auto loan, check valuations from Kelley Blue Book, Edmunds.com or the National Association of Auto Dealers to determine your car's approximate resale value. If your car is worth less than what you owe on it due to age, mileage crashes or other issues, refinancing may prove difficult.\n*   **Interest rates are dropping fast.** If changing economic conditions have significantly brought down the cost of borrowing, you may qualify for a new loan at a lower rate. The average interest rates on a new car loan in the U.S. was 5.76% in the fourth quarter of 2019, according to Experian data—down from the prior year. With Fed rates slashed to near-zero in 2020, it's possible you'll continue to see a greater difference in your new interest rate as time goes on.\n*   **Your credit score is higher.** If you increase your credit score significantly in the 12 months or so after taking out a car loan, you may qualify for loan offers with better interest rates. (When combined with overall interest rate declines, this could rack you up some appreciable savings.)\n*   **You need to cut expenses.** Extending your car loan repayment period may make sense if you need to reduce monthly expenses, even if it means paying more over the course of the new loan. END