Auto Loan Refinance: Best Rates & Lenders

Are you having trouble making your auto loan payments? Looking for ways to save money on your auto loan? How about paying off your car sooner? Applying for a refinance car loan is one of the best ways to achieve these goals—and more.  

It’s not just as simple as applying for the first loan you come across, however. There are a few things to consider to get the most out of refinancing your car loan. We’ll show you what to consider and which top lenders can help you get there.

Reviews of the best auto loan refinance companies

Click the company’s name in the bulleted list to learn why we picked it as one of the best.

• Best for comparison shopping: RateGenius
• Best for flexible terms: iLending
• Best for no fees: LightStream
• Best for lifetime financing: Carputty
• Best for bad credit: OpenRoad Lending

RateGenius: Best for comparison shopping

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Editorial rating: 4.9 out of 5

• User-friendly online loan quote service
• Guarantees secure and confidential application process
• Access to a wide network of trusted lenders

RateGenius offers a straightforward online loan quote service, making it a practical choice for those who value convenience and accessibility. 

Its secure platform protects your valuable information throughout the application process. It connects you with various trusted lenders, increasing your chances of finding the best possible auto refinance loan rates.

Focusing exclusively on auto refinance loans, RateGenius boasts a high customer satisfaction rating and offers competitive interest rates with repayment terms from 36 to 72 months​​.

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iLending: Best for flexible terms

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Editorial rating: 4.8 out of 5

• Skip a payment with some of its lending partners
• Up to 90 days of initial payment relief
• Check your rates without affecting your credit score

As an online marketplace, iLending brings multiple loan offers to your screen. It makes the comparison easier, potentially saving you time and netting you the best deal. It offers competitive rates and terms, with the ability to choose from 12 to 96 months​​ of repayment.

Prequalifying does not impact your credit score, giving you a clear idea of your borrowing status without the negative effects of a hard credit pull.

LightStream: Best for no fees

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• Low rates for good credit borrowers
• Rate Beat program can offer lower rates than other lenders 
• Quick online application and response process

LightStream offers competitive rates for those with excellent credit, making it an ideal option for borrowers looking to save on interest. And with its Rate Beat program, it promises to beat any rate a competitor offers by 0.10%.

LightStream offers loans from $5,000 to $100,000 without vehicle appraisal or age and mileage restrictions. Repayment terms range from 24 to 84 months, with competitive interest rates​​.

LightStream’s hassle-free online application and straightforward approval process ensure a smooth borrowing experience.

Carputty: Best for lifetime financing

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Editorial rating: 4.6 out of 5

• Receive a line of credit of up to $250,000
• Use your funds to refinance and cover all expenses for multiple vehicles over time
• Check your rates without impacting your credit

Carputty is an exceptional choice for lifetime vehicle financing. Once you refinance with Carputty, you gain access to a line of credit that can be used repeatedly for future automotive financial needs, including purchasing new vehicles or covering repairs. This means you can draw from your established line of credit rather than applying for multiple loans over the years.

The online application can be completed in minutes, and pre-approval doesn’t affect your credit score, reducing the initial financial impact. Once you’re part of the Carputty system, you benefit from their V³ Valuation™ tool, which helps track the value of your vehicles and informs you of the best times to buy or sell.

These features, combined with the assurance that your credit line and its terms can last a lifetime, position Carputty as a superior choice for those looking to refinance their auto loans with a view toward sustained, hassle-free management of their vehicle financing needs.

OpenRoad Lending: Best for bad credit

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• Can find solutions for borrowers with credit scores as low as 480
• Refinance between $10,000 and $100,000
• Checking your rate doesn’t impact your credit

OpenRoad Lending is a standout choice for individuals seeking auto loan refinancing, especially those with bad credit. It accepts credit scores as low as 480, making it accessible to many who might struggle to find financing options elsewhere.

Its online application checks your eligibility with several lenders and runs a soft credit check so your credit score won’t be impacted.

OpenRoad Lending takes a comprehensive approach to vehicle financing by offering additional services like GAP coverage and extended service contracts to its customers.

Am I eligible for the lowest auto refinance rates?

Not everyone is eligible for the lowest rates on an auto loan refinance. To qualify for a refinance car loan at all, you’ll typically need to meet the following requirements:

Item	Requirement
Minimum credit score	600
Maximum vehicle age	Eight years
Maximum loan-to-value ratio	125%
Maximum debt-to-income ratio	50%
Maximum vehicle mileage	100,000 miles

The further away you are from these limits, the better your chances of securing the best rates on a refinanced auto loan. But if you don’t meet one or more of these requirements, don’t worry. Most lenders require these, but there’s a lot of variation among financing companies. 

What if I can’t qualify for the lowest rates on a refinance car loan?

You’re in good company if you’re not a refinance lender’s ideal choice for a borrower. Even if you are a stellar candidate, it may not be a good time to refinance, such as if interest rates are much higher now than when you first took out your loan. 

You’re not out of options yet, though. Here are some potential solutions:

• Shop around for rates
• Ask your lender for a loan modification
• Apply with a creditworthy co-borrower or cosigner
• Focus on building credit, growing income, and paying down debt

How do you know if your auto refinance will save you money?

Knowing whether or not a car loan refinance will save you money can be tricky. Many people refinance to get a lower monthly payment, for example—but in many cases, that makes the loan more expensive over the long run. 

In general, choosing a longer term length will help lower your monthly payment, but may increase your total loan cost. Qualifying for a lower rate can help you save money over the long term, but it depends on which term length you choose. 

Here’s an example of how this might work for a $10,000 loan:

	Original car loan	Refinance car loan
Monthly payment	$480	$185 ($295 less)
APR	14%	10%
Term length	2 years	6 years
Total loan interest	$1,523	$3,339 ($1,816 more)

In this case, extending your $10,000 auto loan out for another four years has a big benefit: you free up $295 per month from your car payment. However, you’re paying interest on that car for six additional years, so you spend $1,816 more in interest over the long run.

You can run these numbers using a handy auto loan refinance calculator. Remember to use a loan’s APR to compare your options, which includes the cost of any fees you may have to pay. 

Fees aren’t very common, but some lenders charge prepayment penalties and origination fees. Depending on which state you live in, you may also be required to pay registration and/or title transfer fees. 

Ask the expert

Erin Kinkade

CFP®

I suggest you first decide the why behind your inquiry to refinance. I don’t recommend refinancing an auto loan unless you can obtain a lower interest rate and terms that fit your budget or you are doing debt consolidation (which is not necessarily part of a refinance). Once you determine your why and do your research, speak with a trusted financial professional, family, or friend to help you determine if refinancing will be an overall economic benefit for you. 

How to apply to refinance your car

Here’s how to refinance your car loan, in a nutshell:

1. Check your credit report: Use AnnualCreditReport.com to check over each of your three credit reports for errors. If you find any, fix them before you apply for a refinance.
2. Check your credit score: Your credit score can tell you whether you’re likely to qualify for a refinance and, if so, how much it’ll cost you. 
3. Check your budget: See how much room you have for a monthly payment. Use a refinance calculator to see how much your new payment might be.
4. Gather documents: In addition to details for your vehicle and current auto loan, you’ll need documents proving your income, residence, and identity. 
5. Get prequalified: Contact as many lenders as possible to get prequalified with a soft credit check. This won’t harm your credit, and you’ll get a preliminary loan quote. 
6. Finish your application: Choose the best loan offer and complete a full application. You’ll also need a loan payoff letter from your current lender.
7. Receive a decision: You should hear back within a day or two whether you’re approved if not the same day. Be prepared to respond quickly if the lender requests more info.
8. Continue paying your old lender: It can take a few days or even weeks for the paperwork to settle with both of your lenders. Keep paying your old loan so you don’t miss a payment. 
9. Begin paying your new lender: Once you’ve confirmed your old loan is paid off, sign up for autopay with your new lender. Check with them to see if there are any additional requirements, such as filing to transfer your title to a new lienholder. 

How long does a car refinance take?

Refinancing your car loan can take up to a couple of weeks. In many cases, the timeline is much shorter. 

Many lenders feature automated approval systems, especially if you apply online. If you have a fairly straightforward profile, you may be approved just a few short seconds after you hit “submit” on your application. 

Depending on how fast the lender transfers the money after that, it’s possible to complete your auto loan refinance on the same day. Generally, however, it takes a few days of processing time. 

If speed is a priority, then check with your current lender. Many lenders will refinance their auto loans, and may even offer special rates and deals. Since everything will be handled in-house, processing your refinanced car loan is typically much faster. 

FAQ 

How does refinancing an auto loan affect my credit score?

Every time you apply for refinancing, it triggers a hard inquiry on your credit report that can lower your credit score. The benefits of refinancing can often outweigh the slight drop, making it an option worth considering.

How does an auto refinance save money?

Refinancing an auto loan can lead to significant savings by lowering your monthly payments or interest rates, so you’ll end up paying less over the term of your loan.

What credit score do I need to refinance an auto loan?

Borrowers with a credit score of 600 or above may have the best chances for approval. However, lenders’ requirements can differ, so it’s crucial to shop around to find the right fit for your credit score.

Can I refinance my car loan with bad credit?

Having bad credit may limit your options, but online marketplaces and other tools can assist you in finding lenders willing to work with borrowers with less-than-perfect credit.

What fees are associated with an auto loan refinance?

Potential fees include an application fee, a lienholder fee, and a state re-registration fee. Always confirm any fees with your lender before proceeding with your refinance.

How often can I refinance my car loan?

There isn’t a set limit to how often you can refinance your auto loan. However, too much refinancing could damage your credit score.

Can I refinance my auto loan if I owe more than my car is worth?

While tricky, it’s not impossible. Some lenders may offer to refinance loans for more than a car’s value, but you might face higher interest rates or fees.

Recap of the best auto loan refinance lenders