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Auto Loans

Best Credit Unions to Refinance an Auto Loan

Drivers may want to refinance an auto loan for several reasons—get a better interest rate, remove a cosigner, lower monthly payments, or tap into the car’s equity. While it’s possible to refinance an auto loan through a bank or dealership, credit unions can sometimes offer lower rates.

However, some credit unions have membership requirements. Here’s what you need to know about the best credit union to refinance an auto loan nationally, and how to look for the best deals at local credit unions and determine if an auto loan refinance makes sense for you.

Best credit unions to refinance auto loans

Credit unions tend to offer low rates for auto loan refinancing. They are also known for unparalleled customer service—especially local credit unions. By refinancing your car loan with a credit union, you can prioritize lower payments, more competitive interest rates, or another important financial goal.

But how do you choose the best credit union for refinancing your car loan? We’ve analyzed credit unions nationwide and narrowed our list down to a handful of options that make it easy to qualify and offer competitive refinance rates.

Credit union or marketplaceRates (APR)
iLendingStarting at 5.49%
Navy Federal Credit UnionStarting at 4.54%
RateGeniusStarting at 4.67%
PenFed Credit UnionStarting at 5.44%

iLending: Best for flexible terms

LendEDU rating: 4.8 out of 5

  • Marketplace offering wide lender selection
  • No vehicle restrictions for refinancing
  • Offers up to 90 days of initial payment relief

iLending distinguishes itself in the auto loan refinancing market by providing a platform that connects borrowers with multiple lending options. This makes it an ideal choice for individuals looking for a credit union to refinance without restrictions on their vehicle type. 

This marketplace approach allows for competitive rates and terms tailored to the borrower’s needs. 

iLending stands out for its flexible repayment options, including the ability to skip a payment through certain partners and up to 90 days of initial payment relief, providing significant financial breathing room for borrowers immediately after refinancing.

The absence of vehicle restrictions allows a wide range of vehicle owners to refinance, regardless of their car’s make, model, or age, which is a notable advantage over competitors that impose strict criteria.

Navy Federal Credit Union

LendEDU rating: 3.9 out of 5

  • $200 credit for loans over 60 months
  • Membership available to military, their families, and Department of Defense civilians
  • Specializes in services for active duty, retired, and veteran military members

Navy Federal Credit Union (NFCU) is renowned for its commitment to serving military members, their families, and Department of Defense civilians, offering a range of financial products tailored to their unique needs. 

For auto loan refinancing, NFCU stands out with its offer of a $200 credit for loans extending over 60 months, providing an immediate financial incentive for borrowers looking for longer-term refinancing options. 

This offer, combined with the credit union’s strong reputation for customer service and support for the military community, makes NFCU an appealing choice for those eligible for membership. 

Membership eligibility extends to a broad spectrum within the military community, ensuring that active duty, retired, and veteran military members and their families, as well as Department of Defense civilians, have access to NFCU’s comprehensive financial services. 

RateGenius: Best for comparison shopping

LendEDU rating: 4.9 out of 5

  • Best for comparison shopping and borrowers with bad credit
  • Offers up to 120 days until the first payment with certain credit unions
  • Marketplace with access to discounted checking, savings, and loan options

RateGenius sets itself apart as a marketplace that excels in connecting borrowers with a vast network of lenders, including those seeking refinancing options for bad credit. 

This access to a wide array of financial institutions enables RateGenius to offer competitive refinancing options, with some credit unions in its network providing up to 120 days before the first payment is due to ease the immediate financial burden on borrowers after refinancing.

The platform’s ability to cater to individuals with less-than-perfect credit histories stands out, making it an essential resource for those struggling to find refinancing options through traditional lenders. 

RateGenius’s partnerships with credit unions often offer discounted rates on other financial products, such as checking and savings accounts, and even other loan types, including personal loans and mortgages. 

PenFed Credit Union

LendEDU rating: 3.7 out of 5

  • Easy membership process with a $5 account deposit
  • Welcomes members with a simple online application
  • Offers a variety of financial products beyond auto loan refinancing

PenFed Credit Union stands out for its straightforward membership process, requiring just an online application and a minimal $5 account deposit. This makes it accessible to a wide audience interested in credit union benefits. 

The ease of entry is sure to appeal to those new to credit unions, offering an uncomplicated path to a range of financial services, including competitive options for refinancing auto loans.

Once a member, individuals gain access to PenFed’s comprehensive suite of financial products, not limited to auto loan refinancing. This inclusivity and financial ecosystem offer significant value for those looking to consolidate their financial dealings under a single institution known for competitive rates and member-focused services. 

PenFed’s approachable membership criteria and reputation for offering various beneficial financial products make it a compelling option for anyone considering refinancing their auto loan with a credit union.


These credit union marketplaces and nationwide credit unions are a great place to start when looking for an auto loan refinance. However, local credit unions are also worth your consideration. Research credit unions in your community to see what rates they offer—this is especially nice if you appreciate in-person banking.

Pros and cons of refinancing your auto loan with a credit union

Refinancing an auto loan with a credit union offers a number of benefits, but there are also some drawbacks to consider.


  • Lower rates

    One of the hallmarks of borrowing from a credit union is the lower interest rates. While not guaranteed, many credit unions can offer slightly lower interest rates than big banks. If you’re unsure whether to refinance an auto loan through a bank or credit union, it’s worth comparing rates at both options.

  • Lower fees

    Credit unions may have fewer fees than big banks—and those fees may cost less. Ask credit union representatives about common loan fees such as origination fees, late payment penalties, and early loan payoff fees to understand what you might pay throughout the refinanced auto loan.

  • Positive customer service

    Given that credit unions are member-owned and not-for-profit—and many are considered staples of local communities—they are highly regarded for customer service. If you go with a local credit union (or a national credit union with branches in your area), you can even visit a nearby branch to get in-person assistance with your loan.

  • Easy application

    Many credit unions allow you to apply for a loan refinance online, but you can also meet with loan officers in a nearby branch to discuss your loan options. Speaking with a helpful professional can instill confidence in your decision, whichever way you go.


  • Technology

    As smaller, local institutions, credit unions may not offer the same seamless online banking experience you’ll get at larger banks and fintech companies. While there’s likely an online platform (and maybe even an app) to make loan payments, not every credit union will feel as advanced in user experience online.

  • Membership requirements

    Many credit unions have membership requirements to join. You may need to live in a certain community, work at a specific employer, or be a part of some organization. This can make some credit unions off limits for a loan refinance if you don’t qualify.

  • Fees for current loan

    Whether you refinance with a bank, credit union, or dealership, be aware that you may have to pay an early payment penalty to your current lender.

Ask the expert

Rand Millwood


Joining a credit union is something to consider for many reasons. In addition to good loan options, they provide other benefits for general banking, like better interest rates on savings and money market accounts and more flexibility in approval and rates for other types of loans. If you have access to credit unions, it is always worth evaluating the benefits to determine if they may better meet your needs than other larger banking institutions.

Should I refinance my auto loan with a credit union?

Not sure if refinancing a car loan with a credit union is the right move for you? Here are a few scenarios when it makes sense to refinance an auto loan:

  • High monthly payments: If your current auto loan payments are high and you’re struggling to make them every month, refinancing for a longer loan term would result in smaller, more manageable monthly payments.
  • Lower rates: If you’ve improved your credit score since you first took out your auto loan, you might now qualify for a lower interest rate. Assuming it’s a significantly lower rate, you could save a lot of money over the life of the loan by refinancing.
  • Cosigner: In some cases, you may need a cosigner to buy a car, simply because you don’t have an established credit history or a low score. Once you establish credit and improve your score, you can refinance to take the cosigner off the loan.
  • Cash-out refinance: While you may want to explore more common options to get money fast, such as a personal loan or home equity loan, an auto loan cash-out refinance is another way to tap into the equity you’ve built in your vehicle.

However, there are also scenarios when you might not want to refinance your auto loan, like if:

  • There are high fees: Your current lender may charge a high prepayment penalty that negates any savings you’d achieve by refinancing.
  • You’re buying a new car soon: If you’re planning to purchase a new car within a few months or even a year, it may be a waste of time and money to refinance. Instead, you can wait and sell the car privately or to a dealership—and use those proceeds to pay off the car loan.

How does refinancing an auto loan affect my credit score?

Refinancing an auto loan can have minor impacts on your credit score:

  • Hard credit pull: Before approving you for a loan, the credit union will do a hard credit pull, which results in a slight drop in your credit score. It’s not a huge impact (less than 5 points), however, and it only sticks around on your credit report for a year.
  • Age of credit: One of the factors impacting your credit score is the length of your credit history. By closing an older loan to start a new loan, your average credit history length will drop. This will have a minor impact on your credit score.

That said, refinancing an auto loan could be great in the grand scheme of things. For instance, if your current auto loan payments are too high and you’re routinely making late payments, this can harm your credit score. Refinancing to make payments more manageable sets you up for success—and can help you avoid further damage to your credit.

How to choose the best auto loan refinance through a credit union

Ready to refinance an auto loan? Here’s how to find the best credit union for your needs and apply:

  1. Review your current loan: Start with a basic understanding of how much longer you have on your loan, your interest rate, and if there is a prepayment penalty.
  2. Compare credit unions and banks: To get a true picture of what’s best for you, explore rates and terms at multiple credit unions (both local and national) as well as banks. You can use an online marketplace to compare multiple loan offers at once easily.
  3. Become a member: If you’re not currently a member of your preferred credit union, find out how to join. Although some credit unions have strict requirements, many out there make it easy to become a member.
  4. Compile your documentation: Once you’ve selected a credit union for your car loan refinance, gather all the paperwork you’ll need to apply. For starters, you’ll need current loan documentation, but you’ll also need proof of income (bank statements, tax forms, pay stubs), proof of residence, and proof of insurance. You’ll also need to provide your date of birth and Social Security number.
  5. Wait for approval: Once approved, the credit union will pay off your existing loan and help you get set up for monthly payments on your new loan.

If you still have questions, check out our guide on how to refinance an auto loan.

Recap of the best credit unions to refinance an auto loan

Credit union or marketplaceOur rating
Navy Federal Credit Union3.9/5
PenFed Credit Union3.7/5