Best Auto Loan Refinance for Bad Credit

Refinancing an auto loan can lower your interest rate or extend your repayment term, making monthly payments more affordable. While many lenders prefer borrowers with good credit, refinancing with bad credit is possible.

We’ve researched top lenders offering competitive rates and terms for those with less-than-perfect credit.

Reviews of the best auto loan refinance for bad credit

If you have a credit score below 670, finding the right lender is key to securing a competitive auto refinance rate. Though borrowers with lower scores may face higher rates and additional requirements, such as minimum income levels, many reputable lenders cater to those with bad credit.

We’ve reviewed five lenders and loan marketplaces that offer refinancing options for borrowers looking to improve their auto loan terms, even with less-than-perfect credit.

RateGenius

Best for Comparison Shopping

4.9 _/5

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Why it’s one of the best

RateGenius stands out for individuals looking to shop around and compare auto refinance rates. It connects you with lenders from its extensive network and offers several options.

Its online application process adds to the convenience, making RateGenius a compelling choice for those who want to find the best deal on refinance rates.

• Easy rate comparison
• Broad network of lenders
• Convenient online application process

Refinance details

Rates (APR)	4.67% – 13.35%
Loan amounts	$10,250 – $100,000
Repayment terms	24 – 72 months

iLending

Best for Flexible Terms

4.8 _/5

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Why it’s one of the best

iLending‘s flexible loan terms allow you to tailor your loan terms to your personal financial circumstances. Its commitment to transparency helps you understand your financial commitment. The preapproval process makes iLending a worthy contender for those seeking loan flexibility.

• Customizable loan terms
• Transparency in lender dealings
• Easy preapproval process

Refinance details

Rates (APR)	5.49% – 18.79%
Loan amounts	$5,000 – $150,000
Repayment terms	12 – 96 months

OpenRoad Lending

Best for Sub-500 Credit Scores

4.5 _/5

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Why it’s one of the best

OpenRoad Lending is a strong option for bad-credit borrowers. It offers loan terms of up to 84 months, allowing you to pay back the loan over a longer period. It assures savings on your loan.

• Caters to low credit scores
• Long loan repayment terms

Refinance details

Rates (APR)	4.29% – 17.99%
Repayment terms	24 – 72 months
Loan amounts	$7,500 – $100,000

Autopay

4.1 _/5

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Why it’s one of the best

Autopay offers a wide range of refinance options to lower monthly payments. Its online platform works seamlessly, keeping the application process free from hurdles.

• Many lender options
• Dedicated to lower monthly payments
• Provides straightforward online platform

Refinance details

Rates (APR)	4.67% – 17.99%
Loan amounts	$2,500 – $100,000
Repayment terms	24 – 84 months

Upstart

3.9 _/5

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Why it’s one of the best

Upstart is unique in its use of artificial intelligence to assess loan eligibility. This means current income is not the sole determinant.

The platform evaluates education and job history, providing an opportunity for individuals who are rebuilding their finances. Coupled with a high customer satisfaction rating, Upstart proves to be a good option for those seeking a tech-forward solution.

• Uses AI for fair assessment
• Considers education and job history
• High customer satisfaction rating

Refinance details

Rates (APR)	Not disclosed
Loan amounts	Starting at $3,000
Repayment terms	24 – 84 months

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Best Auto Loan Refinance Companies

How your credit score affects auto loan refinancing

Your credit score plays a large role in your auto loan refinance terms. Higher scores often mean lower interest rates and reduced borrowing costs, while lower scores generally lead to higher rates. For example, with a $20,000 loan over 60 months:

• With bad credit (11% interest): Monthly payment is $434.85, and you could pay $6,090.91 in total interest.
• With good credit (4.99% interest), the Monthly payment drops to $377.33, with a total of $2,639.98 in interest.

Why would you refinance an auto loan with bad credit?

The primary goal of refinancing an auto loan is to save money on a car payment. When your initial loan has a high rate, the interest charges can add hundreds or even thousands of dollars to your total loan amount. Even if you have bad credit, refinancing may provide access to a lower rate. 

Here are other reasons to refinance an auto loan with bad credit.

• Your credit score improved: If your credit score has improved since you applied for the initial car loan, you might be able to get a lower rate by refinancing. That’s true whether your score rose from 500 to 600 or 600 to 700. 
• You want to lower your monthly payment: You might need a lower monthly payment. Refinancing with a lower rate, longer repayment term, or co-borrower might help you accomplish that. 

How to choose the best bad-credit auto loan refinance

Here are the steps to take to ensure you get the best deal available on your refinance.

1. Research and compare lenders

Look into multiple lenders’ requirements, terms, and rates. Shopping around can help you find the best loan for your situation.

2. Prequalify with several lenders

Many lenders let you prequalify with a soft credit check, which won’t affect your score. This gives you an idea of the rates you may qualify for.

3. Select the best loan for your needs

Once you’ve found a loan with favorable terms, gather the necessary documents to apply.

4. Gather required documentation

• Prepare these items to streamline your application:
• Government-issued ID
• Proof of income and employment
• Bank statements
• Car loan documents
• Vehicle Identification Number (VIN)
• Car insurance policy

5. Submit your application and await a decision

After applying, wait for the lender’s decision. Some approvals may take as little as one day.

Consider all your options, including:

1. Borrow a car from a trusted friend or family member while you build your credit score and report.
2. Add a cosigner.
3. If you qualify with a high rate and have no other options, go with the higher rate and, within the next six to 12 months, work on making on-time payments and reducing your debt-to-income ratio while also not applying for additional loans. Once your credit score improves, try refinancing the auto loan to better terms. There’s no limit to how many times you can refinance your auto loan.

Erin Kinkade, CFP®

FAQ

How does bad credit affect my ability to refinance?

Bad credit can make it more challenging to refinance a loan. While many lenders work with borrowers with good or excellent credit, fewer lenders offer options for those with poor credit. You may also get a higher rate if your credit is bad or fair. 

Can I get a cosigner?

Some lenders may allow you to refinance your car loan using a cosigner. Using a cosigner with excellent credit may result in a lower-rate loan with a more desirable term. Cosigners also agree to assume responsibility for the loan if the primary borrower defaults, which helps lower the lender’s risk. 

Can I get lower interest rates with bad credit?

Working with a cosigner or co-borrower could help you get a lower interest rate. You may also work on improving your credit before you refinance because you’re likely to get a lower rate with a higher credit score. 

Can I refinance my auto loan if my car has been repossessed? 

It will be difficult to refinance your auto loan if your car has been repossessed in the past, but specific lenders may allow it. Be aware your refinance loan may have a high rate. 

Can I refinance again after my credit score improves?

Yes, it’s possible to refinance your auto loan again if your credit improves. This could result in a lower interest rate. 

How can I avoid scams and predatory offers?

To avoid scams and predatory offers, research lender history, look at what previous customers said on sites such as the Better Business Bureau (BBB), and never sign anything you haven’t read. Also, compare options and avoid loans with astronomical interest rates.

What are banks that will refinance a car with bad credit?

Even with bad credit, you have refinancing options. Several financial institutions specialize in helping individuals with less-than-stellar credit scores. For example, Autopay offers auto loan refinancing for individuals with bad credit.

How we chose the best refinance auto loans with bad credit

LendEDU evaluates auto loan companies to help readers find the best auto loan refinance solutions. Our latest analysis reviewed 462 data points from 21 lenders and financial institutions, with 22 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Recap of the best places to refinance auto loans with bad credit