Best Car Loan Refinancing Companies
Car loan refinancing can be a savvy strategy to lower your monthly payments or reduce the overall cost of your car loan. Read our guide to choosing the best car loan refinancing company for you by comparing loan terms, maximum loan amounts and services offered.
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Compare our top 6 picks for car loan refinancing
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| Helps people find refinancing loans and lease buyouts. Lets you add a vehicle warranty or gap insurance. Simple online application with no fees. Immediate loan decisions. Loan offers valid for 30 days. APRs as low as 4.99%. | Get a Quote Call Center Open (866) 563-8595 | ||||
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| Partners with banks and credit unions to provide car refinance options. Works with low credit scores and a variety of vehicle types. Approval can take less than a week. Advertises an average savings of $133 a month. | Get Started Call Center Open (866) 683-5505 | ||||
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| Auto loan refinancing company. Connects customers with direct lenders. Personal representatives guide customers through the process. No hard credit pull until you apply with a lender. Works with a variety of credit scores. | Get Started | ||||
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| Online auto refinancing broker offering rate and price comparison services. Additional options include vehicle service contracts and guaranteed asset protection. Customers save $134 monthly on average. No fees for service. | Get Started Call Center Open (888) 710-2831 | ||||
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LightStream
Partner DisclosuresYour loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 8.99% APR with a term of 5 years would result in 60 monthly payments of $207.54. Truist Bank is an Equal Housing Lender. © 2023 Truist Financial Corporation. Truist, LightStream, and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank. | Loan amounts from $5,000 to $100,000. Offers a 0.5% APR discount for using automatic payments. Rate Beat program for competitor offers. Minimum credit score varies. No fees or prepayment penalties. | Get Started | |||
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| Auto financing comparison tool for borrowers with bad or no credit. Offers loans with $0 to $500 down. Accepts trade-ins. Network of over 1,000 dealers nationwide. Leasing and buying options. Online application. | View Rates | ||||
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Caribou
Partner Disclosures**APR is the Annual Percentage Rate. Your actual APR may be different. Your APR is based on multiple factors including your credit profile and the loan to value of the vehicle. APR ranges from 2.32% to 36.00% and is determined at the time of application. Lowest APR is based on loan amount of $45,000 and is available to borrowers with excellent credit and only in certain states. Advertised rates and fees are valid as of 8/5/2022 and are subject to change without notice. Lowest rate of 2.32% APR only available with a 36-month repayment term. Insurance savings will not result from lower APR. | Pre-qualify for loan offers without impacting your credit score. Helps you check your rate without a Social Security number. Takes care of paying off old loans and retitling vehicles. | Get Started | |||
Online refinancing platform for car, truck, SUV and specialty vehicle loans. Compares rates from 150+ lenders. Average savings of $83 per month. Rates start at 2.43%. Fees may be required, depending on the lender. | Chat with a ConsumerAffairs decision guide Live agent | |||||
Online broker for auto refinancing. All types of credit accepted. Customers save on average $95 per month. Requires only soft credit pull for pre-qualification. Terms from 24 to 84 months, with rates as low as 1.99%. | Chat with a ConsumerAffairs decision guide Live agent | |||||
Online platform offering auto loan refinancing. Available in 46 states. Loan amounts start at $9,000. No application, origination or prepayment fees. Check your rate in minutes with no effect on your credit score. | Chat with a ConsumerAffairs decision guide Live agent |
How does refinancing a car work?
Car refinancing is the process of replacing your current car loan with a new one, typically with a different lender. The new loan is used to pay off the balance of the old loan, and you are then left with the new loan terms to fulfill.
Auto refinancing might be the best option for you if:
- Your credit score has gone up. If your credit score was less than ideal when you applied for a car loan, you might be dealing with high interest rates. Once you’ve put in the work to raise your credit score by making on-time payments on your current loan, refinancing could give you a shot at a car loan with a better interest rate.
- Interest rates on car loans have dropped. Maybe you had to purchase a car when interest rates weren’t at their lowest. If you can secure a lower interest rate than what you currently have, refinancing could potentially save you a significant amount of money over the life of your loan.
- You’re struggling to make your monthly car payments. In addition to a lower interest rate, refinancing can also be a way to extend your loan term and lower your monthly payments. If your monthly payments have become too much of a burden, look into extending your loan term by refinancing.
Types of auto refinancing
Auto refinance companies offer different options depending on whether you are refinancing a standard vehicle, like a car or truck, or if you are refinancing a specialized vehicle, such as a motorcycle, RV or boat. Most auto refinancing companies will only refinance personal vehicles instead of commercial vehicles.
- Traditional refinancing: This is the most common type of auto refinancing in which you take out a new auto loan. Ideally, the new auto loan will have a lower interest rate or more favorable terms so that you can save money.
- Cash-out refinancing: Also known as cash-back refinancing, this option allows you to borrow more than you owe on your current loan. Not all lenders offer this option, but if you find one that does, cash-back refinancing can be helpful if you need a lump sum of cash for expenses like home improvements or debt consolidation.
- Auto leaseback: This is a financial arrangement where you sell your car and then lease it back from the buyer. It is an option to free up cash tied up in your vehicle’s worth while still keeping the usability of the vehicle.
What are the requirements for refinancing a car?
Each auto loan refinance company has different eligibility requirements, but many lenders look for the following:
- A solid credit history: Not all lenders will require good or excellent credit, but many will expect a credit history free from bankruptcies and serious delinquencies.
- Proof of employment or income: Lenders often require proof of stable income to ensure you can afford the new loan payments. This can be in the form of paycheck stubs, tax returns or other income documents.
- A minimum outstanding loan balance: Some refinancing companies require that you owe a certain amount of money on your current loan in order to be eligible for refinancing. This amount might be anywhere from $5,000 to $10,000, depending on the lender you choose.
- A clean title: To refinance your vehicle, you need a clean title in your name. If you have a lien, the current loan must be paid off before you can refinance.
- Proof of insurance: You'll need to provide proof of auto insurance to the lender. Some lenders might also require gap insurance, which is coverage that pays the difference between what you owe on your financed vehicle and what it's worth if it's totaled or stolen.
- Proof of residency: Some lenders may require proof of your current residence.
Some refinancing companies have higher credit score requirements than others but may be able to refinance your car loan at a lower interest rate as a result. If you have excellent credit, make sure you take full advantage of it by comparing the refinancing rates of multiple lenders and negotiating with your lender of choice.
Can I refinance my car with bad credit?
“Refinancing a car with poor credit is possible; however, it is extremely challenging,” said Mark Beneke, owner of Westland Auto Sales in Fresno, California. “Most lenders look for borrowers with good credit as they tend to pose a lower risk of default. There are some lenders out there that specialize in working with challenging credit situations but this typically comes with less favorable terms.”
If your goal for refinancing is to get a car loan with a lower interest rate, you’ll have access to better rates by improving your credit score first. If your goal for refinancing is to extend your loan term and possibly lower your monthly payments, you could refinance by working with a lender that specializes in bad credit car loans.
Auto refinance rates
While auto loan rates change regularly, you can check your rates by applying online or through a local car refinancing company. If you’re interested in refinancing your car online, some auto refinancing companies have rate calculators on their websites that let you see the rates available to you if you enter some basic personal information like:
- Your location
- Your current loan balance
- Your current monthly car payment
- Your current interest rate
- Your desired refinance amount
- Your desired loan term
- Your desired interest rate
When you receive an auto refinancing quote, check to see how long the company locks in the interest rate. Some auto refinancing companies lock in rates for just 30 days, while others may lock rates for up to 60 days.
» MORE: How to buy a car with bad credit
How to refinance your car loan
Applying for auto refinancing is a simple process and similar to applying for a personal loan. Once you've decided that auto refinancing is a good fit for you, start by requesting free quotes from lenders; many will give you an estimate without a hard credit check.
Keep repaying your old loan until the process is complete so that you don’t incur any late fees or consequences.
You will want to compare rates and terms to see which company will save you the most money. Additionally, many car refinance companies offer the option for co-signers, which can help you lock in a better rate if your credit score or income level is not as high as you would like.
Once you have chosen the company, the application should be quick and straightforward — many are done online. Your application will be reviewed and you will receive your offer, which will include your rate, your loan terms and any fees. Once you sign this final offer, your new lender will pay off your old loan and your new loan will begin.
Pros and cons of auto refinancing
Refinancing your car can help you save money if you can secure a lower interest rate. However, you will also need to note that while an auto refinance might lower your monthly car payment, you could be paying more over the life of the loan.
“If you truly cannot make ends meet because a payment is too high and refinancing will allow you to have enough money to get through the month without going into further debt, then refinancing is a great option,” said Benske. “However, in our experience, refinancing a vehicle will typically only ‘free up’ under $100 per month and there are better ways to truly save $100.”
Consider these pros and cons before deciding if a car refinance is the best option.
Pros
- Lower interest rates: Refinancing your auto loan could potentially reduce your interest rate, especially if your credit score has improved since you took out the original loan.
- Reduced monthly payments: If you're struggling with high monthly payments, refinancing might allow you to extend the term of your loan, reducing your monthly payment amount.
- Potential savings: If your current loan has unfavorable terms, refinancing could provide better terms and potentially reduce your overall costs.
Cons
- More money overall: Although one of the potential advantages of refinancing is a lower rate, you could end up paying more interest overall, especially if you extend the term of your loan.
- Risk of underwater loan: There is the possibility of ending up underwater on the loan, meaning you owe more on the loan than the car is worth.
- Transaction costs: Refinancing a car loan may involve several fees, such as transaction fees, re-registration fees or state re-titling fees.
Alternatives to auto refinancing
If you are using auto refinancing to access funds, there are other options available, such as a personal loan or refinancing your home. However, if you are looking into refinancing your car because you cannot afford the monthly payment, these alternatives can help.
- Sell your car and lease instead: This option depends on your current vehicle and how much it would sell for, but leasing often comes with lower monthly payments compared to financing a car purchase. With a lease, you're only paying for the car's depreciation during the lease term rather than the full value of the car.
- Consider downsizing to a less expensive car: Again, this option depends on how much your current car is worth, but if you own an expensive or larger vehicle than you need, downsizing to an older, smaller model could help you save money.
- Debt consolidation loan: While you won’t be able to roll your auto loan into a debt consolidation loan, you can use it to help you manage other debts. For example, if you are balancing several credit card bills, rolling them into one manageable personal loan can help you have more funds for your car payment.
- Credit counseling: If you're struggling with your auto loan because of broader financial issues, consider seeking advice from a credit counseling agency. Many credit counseling companies offer free consultations and budgeting advice.
FAQ
How many times can you refinance a car?
While there is no legal limit to how many times you can refinance your vehicle, it can get costly to do it more than once when you consider the fees to refinance, such as loan origination fees. Additionally, many lenders do have a maximum vehicle age or mileage of 10 years/100,000 miles, so you will not be able to refinance the same car past that moment.
What should I do if I don’t get approved for an auto refinance?
While it is a disappointment to get rejected for an auto refinance, it doesn’t mean you are out of luck. You can still improve your credit score and try applying again in a few months. Additionally, the use of a co-signer can increase your chances of approval.
Can I refinance my car with the same lender?
Yes, depending on the lender you’re working with, you might be able to refinance your car loan through the same company. Visit your current lender’s website or speak with a representative to see if refinancing is available. If your current lender doesn’t offer refinancing services, compare the companies in this guide to see if any of them are right for you.
How soon can you refinance a car?
You can refinance your car as soon as one month after purchase, depending on the requirements of your lender and refinancer. Before you pursue refinancing, make sure you’ve taken the necessary steps to get a lower interest rate, including making on-time car payments and maintaining a solid credit score.
Does refinancing your car hurt your credit?
Yes, but not much. Applying for refinancing requires the same hard credit check as your initial car loan, but the effect on your credit is short-lived. Refinancing can also lower the overall age of your debts.
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| Loan amounts from $1,000 to $40,000. Select from three- to five-year terms. APRs from 9.57% to 35.99%. Minimum credit score varies. Origination fee up to 8%. No prepayment fee. | |||||
Partners with Chrysler Capital to offer car loans and auto refinancing loans. Options available for a wide range of credit scores. Get a loan decision in as little as one minute. | Chat with a ConsumerAffairs decision guide Live agent | |||||
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| Loan amounts from $1,500 to $20,000. Select from 24-, 36-, 48- or 60-month terms. APR from 18% to 35.99%. Minimum credit score requirements vary. Origination fee up to 10%. No prepayment fee. | |||||
Online marketplace for secured and unsecured loans. Free to compare rates and quotes from lenders for mortgages, car loans, personal loans and more. Minimum credit score requirements vary. Available nationwide. | Chat with a ConsumerAffairs decision guide Live agent | |||||
Offers auto loans and auto loan refinancing. View cars at local dealerships, compare loan rates and manage your account on the website. Check your application status and get advice from Chase professionals. | Chat with a ConsumerAffairs decision guide Live agent | |||||
Offers full-service banking, including auto loans for new and used cars. Refinancing and lease buyouts available. Complete your application online. Use the PNC Total Auto tool to compare available vehicles in your area. | Chat with a ConsumerAffairs decision guide Live agent | |||||
Online financial institution. Offers checking and savings accounts, CDs and credit cards through U.S. Bank. Offers personal loans through LightStream and mortgages through Rocket Mortgage. Free and low-fee account options. | Chat with a ConsumerAffairs decision guide Live agent | |||||
Offers online auto financing preapprovals through the Auto Navigator tool. Existing car owners can apply for refinancing loans. See dealership partners on the website. Check your loan status through your account. | Chat with a ConsumerAffairs decision guide Live agent | |||||
Credit union offering checking and savings accounts, credit cards, loans and investment services. Anyone can join by opening a savings account. Low fees and competitive interest rates. Some minimums required to avoid fees. | Chat with a ConsumerAffairs decision guide Live agent | |||||
Auto loan refinancing company. Pre-qualification at no cost or credit impact. Works with low credit scores. Information on website is limited. Restrictions on vehicles eligible for refinancing. Accepts co-borrowers. | Chat with a ConsumerAffairs decision guide Live agent | |||||
Read Author Review | Direct auto refinancing lender. Simple three-step process. Find out if you prequalify on its website. Part of the Ally Bank family. Offers additional services like extended vehicle coverage, lease buyouts and GAP coverage. | Chat with a ConsumerAffairs decision guide Live agent | ||||
Read Author Review | Credit union with auto refinancing loans. Apply for refinancing online. Work with a CCU rep to find financing options. No prequalification process or online quoting. Offers traditional banking services and other types of loans. | Chat with a ConsumerAffairs decision guide Live agent | ||||
Read Author Review | Online refinancing company. Works with a network of lenders. Prequalify for a loan in as little as two minutes. View current interest rates and calculate your payments online. Match with lenders who meet your qualifications. | Chat with a ConsumerAffairs decision guide Live agent | ||||
Read Author Review | Online vehicle refinancing. Matches you with lenders that meet your criteria. No prequalification or online quotes. Offers GAP coverage and extended service protection. Provides car insurance through Answer Financial. | Chat with a ConsumerAffairs decision guide Live agent |
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