Refinancing isn't something that can be done right away, especially if you took out a bad credit car loan. But just when should or shouldn't you refinance a car loan? Here's a look at some factors that could play a part in choosing the right time and deciding whether or not refinancing makes sense for you.

Best time to refinance a car loan. Refinancing is something that is typically recommended only after you've had your loan one to two years. Two years is the sweet spot for refinancing, because it gives you time to improve your credit, and lets lenders see how you've handled your loan.

In some cases, though, if you've had your loan for at least one year, and meet all the lender qualifications, refinancing isn't out of the question. However, refinancing may not be right for everyone.

When does refinancing make sense? When you've had your loan for long enough there are still some decisions to make before you jump into refinancing. Not everyone qualifies for refinancing just because they've had their loan for a few years, and not every situation warrants it.

when to refiRefinancing makes the most sense when you need some room in your monthly budget, and wish to lower your auto loan payment. You can achieve this in a few ways: through a lower interest rate, a longer loan term, or sometimes both.

Other times it makes sense to refinance are if your credit has improved significantly since taking out your loan and if your financial situation has changed for the worse. Good or improved credit is a standard requirement when refinancing an auto loan. If your score has improved enough you may qualify for a lower interest rate, which can save you hundreds of dollars over the life of your loan.

If you find yourself in a different financial position and need a little wiggle room, you can always opt to just stretch your loan term. But be aware that you'll pay more in interest charges in the long run, and may be stuck in a negative equity position for longer, too.

When refinancing doesn't make sense. If your finances have gotten better and you're thinking of refinancing to get a shorter loan term, don't bother. Simply pay as much as you can each month to finish your loan faster. The quicker you pay it off the more you save in interest charges.

Additionally, if you're almost done paying off your loan, beware of refinancing. Not only could you be getting into negative equity, but you might also end up paying more for your vehicle than it's worth.

Is refinancing for you? If refinancing is going to end up costing you more in the long run, you may want to reconsider. But, if you're thinking about refinancing your vehicle, make sure that you're saving money to make it worthwhile. The best way to do this is to qualify for a loan with a lower interest rate, and we want to help. To find out what refinancing can do for you, simply fill out our fast, free, auto loan refinancing request form.