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Published: Dec 07, 2023 39 min read
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Company Highlight
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  • Refinance or purchase a new or used car
  • Their lenders have solutions for most credit situations.
  • Get up to 5 offers from competing lenders!
  • Complete simple and secure online form in minutes.
  • Save on your current or new monthly car payment.
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  • No markups or hidden fees
  • Minimum credit score of 650
  • Minimum loan amount of $15,000
  • Complete your refinance in as little as 3 days
  • Take a break from payments for up to 90 days
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  • Save thousands on your Auto Loan within minutes!
  • Skip up to 3 car payments
  • Average savings of $138 per month
  • National lending network with competitive rates
  • $0 out-of-pocket cost
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Save up to $100 on average and enjoy an APR as low as 5.99%

  • Pre-qualify for loan offers without impacting your credit score
  • Trusted by over 50,000 customers
  • Accredited business with an A+ rating from the Better Business Bureau
  • View rates without a credit check or social security number
  • Compare offers from multiple lenders

*Rates and APYs are subject to change. All information provided here is accurate as of December 6, 2023.

The best auto refinance companies offer transparent, reliable service to consumers looking for competitive rates from a variety of lenders, including banks, credit unions and non-depository financial lenders.

Your potential savings will be determined by multiple factors — credit score, annual income and the outstanding amount of your current loan — and the importance of each will depend on the individual auto refinance company.

Read on to see our top picks for the best auto refinance lenders of 2023 and learn how to get the most competitive loan terms that fit your needs.

Why Trust Us?

Our editors and writers evaluate auto refinance companies independently, ensuring our content is precise and guided by editorial integrity. Read the full methodology to learn more.

  • Based on 30+ data points
  • Reviewed 30+ lenders
  • Interviewed 12+ representatives
  • 300+ hours of research

Our Top Picks for Best Auto Refinance Companies of December 2023

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Refinancing your Auto Loan could lower your monthly payments
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Best Auto Refinance Company Reviews

  • Compare up to five auto refinance loan offers
  • Sizeable lender network covers a variety of borrower profiles
  • Minimum credit score, loan terms and other lender details listed
  • Document fees may apply
  • Borrowers must complete loan process directly with lender
Starting APR
Minimum Credit Score
Low 500s
Loan Amounts
Varies by lender
Loan Terms
12 to 84 months

Why we chose it: LendingTree is our pick for best marketplace for its varied lender network, which covers a wide range of credit scores and auto refinance loan needs.

LendingTree offers a network of approximately 40 lenders across the U.S., including banks, credit unions and other financial institutions. When you apply — which requires only a soft credit pull, and won’t impact your credit score — you receive up to five matches.

On the website, you can find important lender details, such as starting APRs, loan terms, loan amounts and the minimum credit score required. However, some pertinent information, such as loan closing costs, is not available. Additionally, not all lenders are listed. If you get an offer you like, be sure to check these details before completing the loan application process.

Read our full review of LendingTree Auto Refinance >>>

  • Approximately 200 lenders in its marketplace
  • Average savings claim of $101 per month
  • Approval decisions in 48 hours or less
  • Co-borrowers allowed
  • Best for credit scores of 660 and higher
  • Partner lenders may charge fees, such as prepaid finance charges or origination fees
Starting APR
Minimum Credit Score
Loan Amounts
Starting at Starting at $8,000
Loan Terms
24 to 96 months

Why we chose it: RateGenius is our runner-up for best marketplace because it has one of the most extensive lender networks in the auto refinance industry.

RateGenius has about 200 lenders in its auto refinance marketplace, making it easy to shop around for the best rate. However, the platform is best for people with credit scores of 660 and higher. As with any auto refinance company, the better your credit score, the more likely you are to be offered the best rates.

However, there are options for people with lower credit scores. Additionally, co-borrowers are permitted, which can help your chances of approval — particularly if that co-borrower has a strong credit history.

Read our full review of RateGenius Auto Refinance>>>

  • No document or origination fees
  • Competitive pricing for GAP insurance, vehicle protection and debt protection
  • Quick application with soft credit pull
  • PenFed membership included with loan processing
  • Borrower is responsible for previous lease payoff once they receive funds
  • Borrower is responsible for any title changes (PenFed reps are available for guidance)
Starting APR
Minimum Credit Score
Loan Amounts
$500 to $150,000
Loan Terms
36 to 84 months

Why we chose it: PenFed Credit Union is our pick as the best direct lender for auto refinance because it offers a streamlined application experience that includes no additional fees for loan processing.

Pentagon Federal Credit Union (PenFed) is a direct lender, meaning that your auto refinance loan will be funded and serviced exclusively by the credit union. While this does mean you can’t compare lender offers with a single application to PenFed, it does eliminate the fees often involved with sourcing a loan through an auto refinance marketplace.

PenFed charges no document or origination fees for an auto refinance loan, and borrowers with credit scores of 640 and higher are eligible to apply. Multiple other creditworthiness factors are also considered, including your debt-to-income ratio and your vehicle’s loan-to-value ratio.

  • Borrowers with poor credit are encouraged to apply
  • Co-applicants allowed
  • Accepts cars up to 15 years old and with 160,000 miles
  • No add-ons
  • No lease buyout
  • Processing fee of $299
Starting APR
Starting at 5.79%
Minimum Credit Score
Loan Amounts
Starting at $7,500
Loan Terms
36 to 84 months

Why we chose it: OpenRoad Lending is our choice for the best auto refinance option for low credit scores because it connects customers to lenders that accept credit scores as low as 500.

OpenRoad Lending regularly works with customers with low credit scores, says company representative Justin Helms. The minimum credit score requirement stands at 500 currently. Helms adds that there are agents available for anyone with questions or in need of guidance throughout the auto refinance process.

OpenRoad Lending accepts cars up to 15 years old, which is considerably more flexible than the 10-year industry average. There’s more leeway in mileage, too: Most companies won’t go beyond 150,000, but OpenRoad Lending accepts autos with up to 160,000 miles.

Co-borrowers are also welcomed, and if the person signing on along with you has good or excellent credit, this can increase your chances of getting the lowest auto refinance rates.

  • Accepts credit scores as low as 525
  • Payment deferrals for qualified borrowers
  • Excellent educational resources for borrowers
  • Low starting loan amount
  • Low maximum loan amount
  • Higher interest rates for low credit borrowers
  • No add-on products (e.g. GAP, vehicle service contract)
Starting APR
Minimum Credit Score
Loan Amounts
$5,000 to $50,000
Loan Terms
Varies by lender

Why we chose it: Auto Credit Express is our runner-up for best for low credit scores because it accepts borrowers with credit scores as low as 525.

Auto Credit Express specializes in helping customers with bad credit or recent bankruptcies or repossessions get better refinance loan rates through its network of lenders. Its minimum credit score requirement is 525. Additionally, lenders available through Auto Credit Express consider borrowers’ financial responsibility when determining approval and loan terms.

For example, if you’ve consistently made on-time payments to your existing auto loan for six months or more, your chances of getting better terms through an auto loan refinance are greater — even if your credit score is low. Auto Credit Express claims that more than 40 percent of its customers save at least $80 per month.

Read our full review of Auto Credit Express Auto Refinance>>>

  • Rates start at 4.49% for borrowers with excellent credit
  • Compare up to four loan offers online within minutes
  • Average savings claim of $150 per month
  • Not available in Alaska or Hawaii
  • Maximum vehicle mileage of 125,000 miles (or 120,000 miles for private party loans)
  • Some lenders may charge fees or a down payment
Starting APR
Minimum Credit Score
Loan Amounts
$5,000 to $150,000
Loan Terms
24 to 84 months

Why we chose it: myAutoloan is our runner-up for best auto refinance company for fair credit thanks to its competitive rates, even for borrowers with credit scores as low as 575.

MyAutoloan recommends a credit score of at least 575 for the best offers and low rates. However, the bulk of its customers, company representative Staci Bailey tells Money, have FICO scores ranging from 620 to 680. Borrowers should also have a monthly income of at least $1,800.

The company’s Auto Loan Interest Rate Estimator can give you a good idea of what your APR might look like, and you can use this tool without providing any personal contact information that could result in communication from myAutoloan about potential offers.

When a customer fills out myAutoloan’s form, the (up to four) offers they may receive are guaranteed as long as all of the information you’ve provided is accurate. The rates and terms shown are not just prospective situations but real prequalified offers. This is because, as Bailey explains, myAutoloan is integrated directly with each lender’s specific loan origination system.

Lease buyouts and cash-out refinance are also part of myAutoloan’s offerings. For qualified borrowers, a payment deferral of up to 90 days is possible too.

Read our full review of myAutoLoan Auto Refinance>>>

  • Offers one of the lowest starting APRs on our list
  • Multiple add-ons available (e.g. GAP, Depreciation Protection, Vehicle Service Contract)
  • Lease buyouts and cash-out refinance available
  • No fees for processing your auto refinance loan
  • Not available in Alaska, North Dakota, Rhode Island, Nevada, Massachusetts, or Washington, D.C.
  • Minimum loan amount is higher than many other companies
  • Must submit personal info for quote, then speak to a representative to apply
Starting APR
Minimum Credit Score
Loan Amounts
$10,000 to $150,000
Loan Terms
25 to 84 months

Why we chose it: Gravity Lending is our pick for runner-up for best for good credit because of its wealth of lenders that cater to borrowers with credit scores of 650 and up.

Gravity Lending offers a diverse marketplace of approximately 70 lenders that refinance auto loans, such as credit unions, banks, hedge firms and other financial institutions. The company handles all the necessary loan processing documentation without charging any fees. This means there’s no origination fee or additional costs from Gravity Lending during the process.

To refinance your auto loan with Gravity Lending, the vehicle can’t be over 10 years old, which is standard for auto refinance. However, the maximum mileage allowed is 100,000 — a bit lower than some other companies on our list. The suggested minimum monthly income for borrowers is $2,000. In terms of credit score, Gravity Lending works with borrowers with scores of 650 and above. (For auto refinance cash-out, the minimum FICO credit score is higher at 750.)

Overall, Gravity Lending is a solid option for anyone with fair credit or higher. The company’s average savings claim is $105 per month, and qualified borrowers may be able to defer starting payments for up to 90 days.

  • iLending handles necessary title changes, pays off previous loan
  • Average monthly savings claim of $133
  • Spanish-language help is available
  • Payment deferral of up to 90 days depends on the lender's opinion of borrower's creditworthiness
  • Approval time could take up to six days
Starting APR
Minimum Credit Score
Loan Amounts
$7,500 to $150,000
Loan Terms
24 to 84 months

Why we chose it: iLending is our pick for the best full-service auto loan refinance company because it handles procedures such as title change and paying off the previous auto loan.

When you refinance an auto loan, the previous loan must be paid off and, in most cases, you’ll pay for a title change at the DMV. While many auto refinance companies delegate these tasks to the borrower, iLending does not. It’s one of the few companies we evaluated that handles all these procedures for you.

Once iLending receives the loan funds from your new lender, the company pays off your previous lender in full. iLending also perfects your title, which means they work with your local Department of Motor Vehicles to remove the previous lienholder and replace them with the current lender. Additionally, if your auto refinance loan requires membership at a credit union, iLending covers any costs involved.

All of these services are included in a $449 doc fee that’s added to the total cost of your loan. Note that it’s quite common for auto refinance companies to charge a doc fee, but not every company includes these tasks in that fee.

  • No restrictions on car mileage, year, make, or model
  • No origination fee for loan processing
  • Co-borrowers permitted
  • Longer terms (up to seven years)
  • No prepayment penalty
  • Excellent credit required
  • Hard credit check required to apply
  • No cash-out refinance options
  • Must have a Visa or MasterCard credit card for identity verification purposes
Starting APR
7.74% with AutoPay discount
Minimum Credit Score
Loan Amounts
$5,000 to $100,000
Loan Terms
36 months to 84 months

Why we chose it: LightStream is our pick for best auto refinance for any kind of vehicle because it places no restrictions in terms of make, model, year or mileage.

LightStream is one of the few lenders with no vehicle restrictions on its auto refinance loans. There are no limitations in terms of vehicle age, make, model or mileage, so customers can refinance new, used and even classic cars. LightStream also works with other vehicles, like motorcycles and ATVs.

This flexibility is possible because LightStream offers unsecured loans. This means you’ll keep your vehicle title, unlike when purchasing a secure loan. LightStream representatives explained to Money that the company is underwriting the borrower, not the vehicle.

Lightstream’s annual percentage rates are higher compared to other companies we evaluated, and the lowest rates are available only to borrowers with excellent credit. Still, the lender’s lack of limitations on vehicle requirements is unparalleled. For those with older, high-mileage vehicles who have a high-rate auto loan, a refinance with LightStream could still mean significant savings. Use LightStream’s online rate calculator to get an idea of potential rates for your specific situation.

A bonus in working with LightStream is the lender’s commitment to social responsibility. Through its partnership with American Forest, LightStream plants a tree for every loan funded.

Read our full review of LightStream Auto Refinance>>>

  • New-to-credit program available
  • No make, model, or year restrictions on vehicles
  • Easy membership process: Open a savings account with a minimum of $5
  • Direct deposit required for APR discount
  • Electronic payments required for APR discount
Starting APR
Minimum Credit Score
New-to-credit program available
Loan Amounts
No minimum, max $500,000
Loan Terms
12 to 84 months

Why we chose it: DCU is our pick for best auto refinance for newcomers to credit building because it works with borrowers who don’t have strong credit histories.

A fully digital auto loan refinance experience can be a plus, but for some borrowers, some guidance goes a long way. Digital Federal Credit Union, known as DCU, offers personalized help for auto loan refinance shoppers who have little or no credit history. This can include a phone call from a representative who might suggest adding a co-borrower.

Note that the starting APR at DCU reflects enrollment in electronic payments as well as recurring direct deposits to a DCU account. An extra discount of 0.25% is available to vehicles considered energy efficient, like electric vehicles or cars with a 35 mpg average. Additionally, a 60-day deferment on the first payment is standard for any DCU auto loan refinance.

DCU also works with motorcycles, boats, RVs and ATVs, plus salvaged vehicles, though these do require an appraisal and further investigation. The credit union’s mileage maximum is 200,000, which is a bit higher than other companies — another factor we appreciate about refinancing an auto loan with DCU.

Read our full review of Digital Federal Credit Union (DCU) Auto Refinance>>>

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Other Auto Refinance Companies We Considered


  • Starting APR 5.99%
  • Compare rates without a hard credit check or Social Security number
  • Multitude of add-ons available (e.g. GAP, Extended Vehicle Protection)
  • The $399 processing fee charged to lenders may be passed to the borrower
  • Not available in Mississippi, Maryland, Nebraska, Nevada, Wisconsin or West Virginia
  • No lenders offering auto lease buyouts

Caribou is a digital platform that connects borrowers with a vast network of partner lenders — primarily credit unions and community banks — offering some of the best auto refinance loans. However, Caribou charges a document fee for its service, and there’s no guarantee the lender you ultimately work with won’t charge additional fees on top of that.

Why Caribou didn’t make the cut: Caribou’s document fee of $399 is higher compared to other companies we evaluated.

Read our full review of Caribou Auto Refinance>>>

Consumers Credit Union (CCU) new

  • Detailed auto refinance calculator to check your potential savings
  • CCU membership unlocks savings on other financial products, such as home loans and business loans
  • Starting APR of 6.84% is slightly higher than other companies we evaluated
  • No information about applicant requirements, such as minimum credit score
  • No information available about loan closing fees

Consumers Credit Union (CCU) is a direct lender for auto refinance loans. You must be a member of CCU to receive a loan, but the process is relatively easy: Pay $5 to the Consumers Cooperative Association, then open and maintain a CCU savings account ($5 minimum). However, the company hasn’t responded to our requests for an interview, so we can’t confirm important auto refinance details, such as documentation fees or credit score requirements.

Why Consumers Credit Union didn’t make the cut: Consumers Credit Union lacks transparency about its credit score requirements, loan terms and fees, so we can’t adequately compare it to other auto refinance companies.


  • Loan amount minimum is $4,000 (lower than most companies)
  • No specific income requirement
  • APR starting at 5.99%
  • No add-ons
  • No lenders for credit scores below low 600
  • APR could be as high as 24.99%

While its average customer has a FICO score close to 700, LendingClub has lenders in its auto refinance online marketplace that will consider borrowers with credit scores in the low 600. (These numbers were provided to Money by a LendingClub representative.)

LendingClub charges no origination fee, processing fee or down payments on its auto refinance loans. However, loans may be subject to fees from the loan lenders.

Why LendingClub didn’t make the cut: Its average monthly savings claim of $78 is lower than the companies in our top picks.


  • Full-spectrum credit lender
  • Average monthly savings claim of $150
  • APR starting at 5.29%
  • Rates for bad credit borrowers are less favorable
  • Full coverage insurance required
  • Document fee of $498 required

RefiJet almost made our top picks for its slightly higher-than-most maximum mileage (150,000) and low starting annual percentage rate for borrowers with excellent credit. The company offers loan options for borrowers with poor credit, too. Also, depending on creditworthiness, borrowers may be eligible to defer up to three months of payments on their refinanced loan.

Why RefiJet didn’t make the cut: RefiJet’s document fee includes paying off the previous lienholder and changing your vehicle title, but the fee ($495) is slightly higher than other companies that offer the same service.


  • Loans starting at $9,000 with terms from 24 to 84 months
  • Approval based on more factors than just credit score
  • No application fee, no origination fee, no prepayment penalty
  • Potential borrowers get a single best rate, so there's no opportunity to compare offers
  • No cash-out refinance or lease buyouts
  • No co-borrowers

Creditworthiness at Upstart is determined not only by your FICO score, Auto Refinance General Manager Val Gui tells Money. The company’s proprietary AI also considers 1,000-plus other factors, like your savings, employment and the highest level of education you’ve completed.

Why Upstart didn’t make the cut: Because Upstart doesn’t provide a starting APR without entering personal information, we’ve decided to leave it off our top picks for now.

Auto Approve

  • APR starting at 5.24%
  • Loan terms from 12 - 120 months
  • Title change handled by Auto Approve
  • Add-ons like GAP and 24/7 roadside assistance available
  • FICO score required for lowest APR is 730 or higher
  • Document fee at loan processing is $488
  • Terms for low credit applicants are less favorable

Borrowers approved for auto loan refinance through Auto Approve save an average of $148 monthly, company representatives tell Money. You’re not required to provide your Social Security number to receive a quote. Auto Approve’s minimum FICO score allows for low credit applicants; the minimum score required to apply is 580. For monthly income, the company requires a $2,000 minimum.

Why Auto Approve didn’t make the cut: The document fee of $488 is a little higher than what’s charged by other companies.

Bank of America

  • Lease buyouts for qualifying borrowers
  • Refinance car loan calculator for quotes requires no personally identifying information
  • Bank of America customers may qualify for Preferred Rewards discounts of 0.25% - 0.50%
  • Starting APR of 7.44% is higher than other companies we evaluated
  • Car must be valued at $6,000 or more
  • May require a down payment for refinancing

Bank of America offers auto refinance loans starting at $7,500, or $8,000 in Minnesota. Loan terms are 42 - 72 months. Its average monthly savings claim is $60, which is significantly lower than other companies we evaluated.

Why Bank of America didn’t make the cut: Its annual percentage rates are higher and its monthly savings claim is lower than many other companies in our top picks.

Capital One

  • 90% of prequalified applicants are ultimately approved
  • Capital One handles paying off previous lienholder
  • Minimum monthly income requirement is low at $1,500
  • May require payment to the current loan before approval
  • No lease buyouts or cash-back refinancing options
  • Current loan amount capped at $50,000

Capital One offers potential customers the opportunity to pre-qualify for an auto loan refinance with only a soft credit pull. The online application for an auto refinance loan takes only about five minutes to complete. Capital One also has an app available (called the “Auto Navigator”) for iOS and Android, through which potential customers can shop for cars and financing options.

Why Capital One didn’t make the cut: Auto refinance borrowers may be required to pay down the balance of their current car loan if their payoff amount is higher than the company’s limits. There’s also no information about starting annual percentage rates for auto refinance loans on its website.

Navy Federal Credit Union

  • Cash bonus of $200 may be available
  • Competitive starting APRs: 4.54% for new vehicles, 5.44% for used vehicles
  • Membership restricted to members of the armed forces, veterans, their families and household members, Department of Defense personnel
  • Average savings of $62 per month is lower than other companies we evaluated
  • Best annual percentage rates only available to excellent credit borrowers

Navy Federal Credit Union offers auto refinance loans at competitive rates, especially for borrowers with excellent credit. Rates vary by mileage and model year, with lower rates for vehicle model years 2022 and newer with 30,000 miles or less. Vehicles that are more than 20 years old may be eligible for auto refinance loans, but starting APRs are significantly higher.

Why Navy Federal Credit Union didn’t make the cut: Navy Federal’s average savings claim of $62 is lower than many other companies we evaluated.

PNC Bank

  • Auto refinance loans from $5,000 to $100,000
  • Check potential rates using online calculator
  • Co-borrowers allowed
  • Starting APR of 6.84% is slightly higher than other companies we reviewed
  • PNC Bank does not handle title transfer
  • Rate estimates via calculator are higher than other companies we evaluated

PNC Bank is a regional bank that lends directly to borrowers. You can pre-qualify for an auto refinance loan with only a soft credit pull for loans from $5,000 to $100,000. Loan terms range from 12 to 84 months. While PNC Bank does not offer title transfer services for its borrowers, the lender does handle paying off the existing loan with the previous lienholder.

Why PNC Bank didn’t make the cut: Compared to other companies in our top picks, starting annual percentage rates for auto loan refinance at PNC Bank are a bit higher than average.

Auto Refinancing Guide

Refinancing can give access to better interest rates when your credit history has improved since taking out your current auto loan. However, it’s not a decision to be made lightly, as it may mean additional fees and a hit to your credit score.

How does refinancing a car work?

Refinancing a car works in two ways: traditional auto refinance and cash-out refinance.

Traditional auto refinance is when you replace your existing auto loan with a new car loan that has a better annual percentage rate or lower monthly payments. You pay off your previous loan using the new loan.

With a cash-out refinance, you take out a new loan to cover your original loan, but you also receive an additional amount of money that can be used for any purpose.

Traditional auto refinance

Refinancing a car generally means taking out a new loan to pay off the balance on your existing vehicle loan, ideally for a lower rate. Since your original loan is replaced by a new financial obligation, you gain a new APR and new term length.

As an added bonus, your car insurance premiums are likely to go down as well. If you’re looking to change insurers, you can also check out our list of the best car insurance companies.

Cash-out auto refinance

A few auto refinance companies also offer cash-out auto refinances, in which your new loan covers your existing balance and provides an additional amount of money. While a cash-out refinance may have lower interest rates than other options, such as personal loans or credit cards, your monthly payments will go up. This type of loan also has a higher risk of going upside-down.

Auto refinancing pros and cons

  • Longer refinancing terms decrease your monthly car payments
  • Shorter refinancing terms can save you money in the long run
  • May obtain lower interest rates
  • No down payment necessary
  • Most manufacturer warranty policies still apply after refinancing
  • Total interest will go up if you extend loan repayment terms
  • A shorter loan term will increase your monthly payments
  • Prepayment penalties and refinancing fees can offset any interest rate savings
  • Lenders may charge an origination fee on the new loan

Auto refinancing requirements

Before beginning the process, it’s important to make sure refinancing is the right solution for you and whether you meet the qualification requirements. Carefully consider the following:

  • Your existing loan’s prepayment protocol - Check your existing auto loan agreement to find out if you’ll be penalized for paying early. (This is called a prepayment penalty.) If so, crunch the numbers to see whether an auto refinance makes sense.
  • Loan balance versus your car’s market value - Your loan balance is higher than the car’s market value. If you’re “underwater,” or owe more than the car is worth, many lenders won’t consider you for an auto refinance loan. (You can check your car’s value on Kelley Blue Book.)
  • Vehicle age and its mileage - Auto refinance lenders have restrictions you’ll have to meet. Many won’t offer loans for cars more than 10 years old or that have over 120,000 miles.
  • The status of your current loan payments - Your loan payments should be up to date. If you’re behind on payments, many lenders won’t consider you a viable candidate.
  • The balance of your current loan - Each lender has a maximum and a minimum loan amount they’ll refinance. If your loan’s current balance is too low or too high, you may not qualify. Many loan providers also have minimum loan amounts (and maximums) to consider.
  • The kind of car you have - Generally, auto refinance companies won’t refinance cars that are “branded,” meaning rebuilt, salvaged or commercial vehicles.

When can you refinance a car loan?

Deciding when you should refinance your loan depends on a number of factors. While a refinance is technically possible even on a new loan, there are some conditions under which it makes the most sense.

When your current deal isn’t great

Thanks to global shipping issues and high demand, and if you didn’t do some careful comparison shopping between lenders or dealerships when you bought your car, your loan may not have the best repayment terms or rates.

For instance, if your current APR is around 20-25%, you might be able to get a better offer by shopping around. This is particularly true if your loan is two years older or more, as many loans with high APRs charge most of the interest amount during that time period.

When your credit score has gone up

An improved credit score will likely give you access to much better repayment terms and lower interest rates. If your score was 640 when you received your original vehicle loan, your credit score was considered fair by FICO standards, and you likely committed to a high annual percentage rate. However, once you reach good credit (670) status or better, auto loan refinance companies may offer a better annual percentage rate and more favorable repayment terms.

When your current loan payments are too high

An auto loan refinance provides an opportunity to lower your monthly car payment. This is achieved through extending the life of your loan, which means you’ll pay more interest over the long run. But for those who need more room in their monthly budget, a drop in their car payment could be helpful.

For example, consider an original loan for $45,000 with a term length of 60 months at a 6.3% annual percentage rate. The monthly payment for this loan would be $876. If you refinance at 84 months at the same annual percentage rate, your payment drops to $664 — a savings of more than $200 monthly.

However, this longer loan term means you’ll pay more interest than you would have with the original loan. In the first scenario, the interest total is $14,175. Extending the loan term to seven years as opposed to the original five years means you’ll accrue $19,845 in interest owed — an increase of $5,670.

How to refinance a car loan

Once you’ve weighed your options and decided a refinance of your current loan is the way to go, follow these simple steps.

  • Check your credit score - If you have good credit, you'll likely get a better deal. This may be a good time to ensure there is no incorrect information in your credit report.
  • Gather all the information about your current auto loan - Having all your information at hand will help speed the application process.
  • Research new lenders and compare rates - While it may take some time, thoroughly researching auto loan refinance lenders and loan offers to find the best offer can not only help you compare rates, but also identify any potential red flags. You can also see whether your current lender offers a competitive auto loan refinance option, but keep in mind that some lenders will not refinance loans from their own company.
  • File for prequalification - Getting a pre-approval, when available, presents you as a good candidate for a refinance.
  • Submit an application - Once you've gathered all your documents and have chosen a lender, it's time to apply. Many lenders offer an online application.
  • Evaluate the terms - Carefully read the fine print about loan terms. Check whether you can keep your current insurance policy under the new lender’s requirements.
  • Finalize the loan - Remember to keep making your payments on your existing auto loan until the new auto refinance loan is finalized.

Documents needed to refinance your auto loan

To refinance any kind of loan, some documentation is required. These pertain to personally identifiable information, income, residence and your car’s specifications, among others.

Here’s a detailed list:

☑ Social Security number
☑ Employment information
☑ Residence information
☑ Driver’s license
☑ Car registration and mileage information
☑ Proof of insurance

Does refinancing a car hurt your credit?

There’s a difference between a hard vs. soft credit inquiry, and it’s important to know which kind of credit inquiry a lender is using when you apply for an auto loan refinance. Most lenders conduct a soft pull on your credit for pre-qualification, also known as pre-approval, and this won't affect your credit score. However, there are some lenders that conduct a hard inquiry on borrowers right away. A hard inquiry, also called a hard pull, will likely knock your credit score down a few points.

Past the preapproval process, it’s standard for lenders to conduct a hard credit pull in order to move forward with the loan underwriting process. You don’t have to commit to the loan offered at approval, though, so if you want to continue comparing offers but minimize the potential credit score drop, make sure to loan shop within a 14 to 45-day window. Credit bureaus will count these as one single pull.

Unauthorized hard inquiries aren’t unheard of, so make sure the lender is trustworthy. If you find unauthorized inquiries on your report, here’s how to remove negative items on your credit report.

After finalizing the loan, your credit score will also drop slightly because the refinance is considered new debt. However, this new account is effectively replacing an older debt, so the credit impact shouldn’t be significant. Be sure to check your credit scores across credit bureaus — see our guide to VantageScore vs FICO.

In any case, remember to keep making your payments on your current loan until the refinance has gone through. Otherwise, your credit could be affected. Also, be sure to find out if your new auto refinance lender will pay off your old loan for you or if you’ll need to handle that yourself.

How to refinance a car loan with bad credit

You must have a minimum credit score of 640 if you hope to get the best rate on an auto refinance loan. However, just like when you seek to get a car loan with bad credit, there are lenders that specialize in auto loan refinance for bad credit borrowers. Here are some cases in which refinancing may still be helpful, even if you have poor credit:

  • If auto loan rates have gone down - Even with bad credit, you may still be able to find a lower rate or better loan terms if the market has improved since you purchased your original loan.
  • If your goal is a lower monthly payment - If your main driver in refinancing your auto loan is decreasing your monthly payment, this may mean extending your loan term. The downside is that this will extend the life of the loan, and you’ll therefore pay more in interest as well.

If you’re determined to refinance your car loan despite a spotty credit history, follow the steps outlined above. It may make sense to check out competing offers on a marketplace website such as LendingTree or RateGenius. You may also be able to get better rates with a lender that allows you to add a co-signer to your loan.

Another option is to consider debt consolidation, which can streamline your loan payoff strategy.

Finally, if you can’t find a good deal, taking steps to fix your credit may end up being your best move in the long run. An improved credit score will affect every area of your finances, not just your auto loan refinance offers. While most credit repair strategies are possible to do yourself, if the time commitment is too high, you may want to check out our list of the best credit repair companies.

Auto Refinance Glossary

Loan-to-value - This is how much you’ve borrowed (also called the principal) that remains unpaid versus the car’s current value. Calculate LTV by dividing your unpaid loan balance by the car value, then multiply the result by 100 for a percentage.

Upside-down or Underwater - If your auto loan balance is more than your vehicle is worth, you’ve gone upside-down or underwater on your loan. Typically, auto refinance lenders will not sell refinance loans to customers who are currently upside-down on their existing car loans.

Interest rate - This is the annual cost of borrowing from a lender. It’s expressed as a percentage and added to the principal (total loan amount). Note: The interest rate is not the same as the annual percentage rate.

Annual percentage rate (APR) - This percentage reflects the total cost of borrowing from a lender. It includes the interest rate and any fees, such as origination fees, lender compensation fees (also called prepaid finance charges) and sales tax.

Debt-to-income (DTI) - DTI is how money you have available to spend, and lenders usually look for DTIs of 36% or lower. Calculate DTI by adding up monthly debt payments (e.g. rent, loan payments, insurance premiums, credit cards), then divide that number by your monthly gross income (total amount you earn before taxes), and multiply the result by 100 to get a percentage.

Lease - A car lease contract permits you to drive a vehicle for a set amount of time for a set cost, with stipulations including mileage limitations and maintenance requirements. Most car leases are acquired through dealerships, though some banks and credit unions offer facilitation services. When your lease expires, you may be able to buy the car or sign a new lease for a new vehicle.

Loan Pre-Approval - A loan pre-approval is not an official offer, but it does provide you with an estimated loan rate and terms based on a superficial review of your financial situation. If you move forward with your loan application, you’ll be asked for additional details, which will be analyzed with more scrutiny. Subsequently, your loan offer could look very different from your pre-approval offer.

Loan Approval - A loan approval requires underwriting, or the process of conducting a hard credit check and a review of your financials (e.g. income, employment history). The offer you receive via loan approval is a guaranteed offer — unlike a pre-approval, which is an estimate and not a guaranteed offer. However, you can still decline to accept a loan offer for any reason.

Cash-out refinance - Also called a cash-back loan, an auto loan cash-out refinance is similar to a mortgage cash-out refinance. For example, if your car is worth $15,000 and you still owe $8,000 on your auto loan, a cash-out auto refinance from a lender for 80% of the car’s value would mean you borrow $12,000. You use those funds to pay off the remaining balance of the original loan, and the amount you’re left with — in this case, $4,000 — can be used for any purpose.

Latest Auto Loan Refinancing News

The majority of cars on the market today cost more than $20,000, which means your monthly car payment could be a financial strain on your budget — especially if you didn’t get the best auto loan rate at purchase time. If you find yourself struggling to make your car loan payments, an auto loan refinance could be a potential avenue for savings.

Six months or more of payments to your current loan may have improved your credit score, which could mean more favorable loan terms by replacing it with a new auto loan, also known as an auto loan refinance. Even a slight reduction in your interest rate or monthly payment could be a boon to your financial situation. In fact, many auto refinance companies claim an average monthly savings of about $150.

How We Chose the Best Auto Refinance Companies

To help consumers decide whether auto refinance is worth the cost, we put ourselves in the shoes of someone looking to refinance their car loan. To that end, we contacted every company on this list and interviewed a dozen representatives. We conducted more than 300 hours of research and vetted the companies according to loan costs, customer support and eligibility requirements.

We also looked at each lender's minimum annual percentage rate (APR) as of November 2023. Keep in mind that the specific loan terms and pricing will vary depending on your unique financial profile.

When looking for the different auto refinance companies in the industry, we considered several criteria.

  • Financial stability - We looked at each company’s financial stability to make sure they’d be able to meet their refinancing obligations.
  • Loan options - We looked for auto refinancing companies that offered competitive interest rates, zero to no upfront fees and flexible or reasonable vehicle restrictions.
  • Customer experience - We looked at each company’s complaints with the Consumer Financial Protection Bureau (CFPB), Better Business Bureau (BBB) and the Federal Trade Commission (FTC). We also checked whether each company was transparent regarding its partners, underwriters and fees.
  • Financial products - We also took into account each company’s array of financial products and interviewed representatives from some companies.

Although we always try to include accurate and up-to-date information on regulatory and legal actions, we don’t claim this information is complete or fully up to date. Annual percentage rates are subject to change. As always, we recommend you do your own research as well.

Summary of Money’s 10 Best Auto Refinance Companies of December 2023