Best Auto Loan Refinance Lenders of March 2024
Updated March 18, 2024 at 11:31 am
Check out the top auto refinance lenders to save money.
Refinancing your auto loan may lower your interest rate or provide better terms. Whether you had less-than-perfect credit when you bought the car or needed a lengthy term to keep the payment low, you may qualify to refinance for a lower rate, shorter term or any other attractive factors you need.
You can use direct auto refinance lenders or an aggregator that works with hundreds of lenders to provide the best rates and terms. The key is finding the loan that saves you the most money over the loan term while providing affordable monthly payments.
Our Methodology Our research is designed to provide you with a comprehensive understanding of personal finance services and products that best suit your needs. To help you in the decision-making process, our expert contributors compare common preferences and potential pain points, such as affordability, accessibility, and credibility.
Our Picks - Best Overall: myAutoLoan
- Best for No Origination Fee: LendingClub
- Best for Bad Credit: Upstart
- Best for Personal Support: RefiJet
- Best for Longest Terms: Consumers Credit Union
- Best for Large Lender Selection: RateGenius
- Best for Choosing Your Reason to Refinance: Caribou
- Best for Skipping Payments: Gravity Lending
- Best for AutoPay Discount: Lightstream
- Best for Using a Co-Borrower: Auto Approve
- Best for No Application Fee: OpenRoad
- Best for Low Income: iLending
12 Best Refinance Auto Loan Lenders of 2024
Best Overall
Why we chose it: myAutoloan offers up to four offers per applicant with rates starting at 5.49% for loans of 36 months or less and has options for borrowers with bad or fair credit. Their lenders offer loans with terms of 36 to 84 months (some lenders may offer terms shorter than 36 months), and myAutoloan only does a soft credit pull when you apply and receive offers.
Pros
- Options for all types of borrowers
- Multiple offers with one application
- Simple application process
Cons
- It can take longer to fund, depending on the chosen lender
- May have vehicle restrictions, depending on the lender
- Most customer service is online and not available via phone
Best for No Origination Fee
LendingClub
Why we chose it: You may know LendingClub for its personal loans, but they also offer auto loan refinance with no origination or prepayment penalty fees. Rates currently range from 4.99% to 24.99%, and you can check your rate in minutes with a soft credit check. LendingClub states that their borrowers save an average of $43 per month.
Pros
- Loan amounts from $4,000 to $55,000
- Provides offers instantly
- All documents are electronic for a fast process
Cons
- The vehicle must be less than ten years old
- Not available in all states
Best for Bad Credit
Upstart
Why we chose it: Upstart focuses on more than your credit score; they look at the big picture, including an applicant’s education history and current employment. Loan terms range from 24 to 84 months. Read our Upstart review. Learn more about Upstart.
Pros
- Easier qualifying guidelines
- Fully online process for fast funding
- Works with many lenders
Cons
- Co-borrowers not allowed
- It can take up to two weeks to finalize and fund your loan
- Not available in MD
Best for Personal Support
RefiJet
Why we chose it: RefiJet uses a personalized process to help with auto loan refinancing, providing applicants with a Financial Services Representative who is your go-to person throughout the process. Your representative will help you complete the application, understand your options, submit your application to the chosen lender and help you understand your loan documents.
Pros
- Offers phone support
- Works with a variety of credit scores
- Provides dedicated Financial Services Representative
Cons
- Only works on cars ten years or newer
- Vehicle must have fewer than 150,000 miles
- Full coverage insurance and a valid driver’s license required
Best for Longest Terms
Consumers Credit Union
Why we chose it: Consumers Credit Union offers loan terms as long as 84 months, which works great for borrowers looking to lower their payments. Rates start at 6.54%, which is somewhat higher than what other lenders offer. But it can be a good option if you’re looking to stretch their payments out over a longer term. Learn more about Consumers Credit Union review.
Pros
- Offers 60 days with no auto loan payment
- No application fees
- 24/7 online application
Cons
- Must be a member of Consumers Credit Union
- High starting APR
Best for Large Lender Selection
RateGenius
Why we chose it: RateGenius works with 150+ lenders, helping applicants refinance car loans. They have over 25 years of experience and excellent customer reviews from people who have saved money refinancing their auto loans.
Pros
- Interest rates start at 4.67%
- Provides phone support
- RateGenius states the average borrower saves $101 per month
Cons
- The chosen lender may charge an origination fee
- Some lenders require a hard credit inquiry with the application
- It may be challenging to qualify for the lowest advertised rates
Best for Choosing Your Reason to Refinance
Caribou
Why we chose it: Caribou offers rates starting as low as 5.99% on their shortest term, 36 months. Rates go up to 28.55% for longer terms, or to compensate for less-than-optimal qualifying factors. But on average their customers save $115 monthly and can get prequalified in minutes.
Pros
- Competitive interest rates
- No Social Security number is required to apply
- Works with a large network of lenders
Cons
- Doesn’t offer lease buyouts
- Lenders may charge applicants an origination fee
- All documentation must be uploaded; no fax or mail option
Best for Skipping Payments
Gravity Lending
Why we chose it: Gravity Lending states customers can save an average of 18% each month. Terms range from 25 to 84 months, and Gravity Lending also allows you to delay payment for up to 90 days after approval.
Pros
- Rates starting at 4.99%
- Large network of lenders
- Doesn’t charge any fees
Cons
- Must have a minimum loan balance of $10,000
- Doesn’t disclose the minimum credit score required
- Long funding timeline
Best for AutoPay Discount
Lightstream
Why we chose it: Lightstream offers low rates ranging from 7.74% to 15.94%. The lender also offers a 0.5% discount if you set up autopay, apply for the refinance, and have loan amounts of $5,000 to $100,000. Learn more about Lightstream.
Pros
- Offers same-day funding
- No age or mileage restrictions
- Transparent about maximum APRs
Cons
- Higher than average starting APRs
- Doesn’t offer pre-approvals
- Requires high credit scores
Best for Using a Co-Borrower
Auto Approve
Why we chose it: If you don’t qualify to refinance a car loan yourself, you may qualify with a co-borrower, which Auto Approve allows. They offer many options, including a 90-day deferment option for your first payment.
Pros
- Some partner lenders offer autopay discount
- Offers instant approval
- Offers phone support
Cons
- You may pay an origination fee
- Some lenders in the network require a high credit score
Best for No Application Fee
OpenRoad
Why we chose it: OpenRoad saves its borrowers an average of $100 a month when they refinance their auto loan. They refinance up to 120% of qualified vehicles, with exceptions up to 175%.
Pros
- Fast application process
- Provides phone support
- Saves the average borrower $1,200 annually
Cons
- Vehicles must be 8 years old or newer
- Mileage cannot exceed 140,000
- Minimum loan amount is $7,500 in most states
Best for Low Income
iLending
Why we chose it: iLending works with applicants with credit scores as low as 560 and has a low monthly income requirement of $1,500 to qualify. They offer loan amounts starting at $5,000 and up to $150,000.
Pros
- Application takes only a couple of minutes
- Has loan terms of 12 to 96 months
- APRs start at 5.49%
Cons
- No guarantee that you can skip payments
- You may need a down payment if you have negative equity
What Happens When You Refinance Your Car Loan?
When you refinance your car loan, you pay off your existing loan with a new loan. You’ll need to complete a loan application and provide proof that you qualify for the loan. You won’t need a down payment, but the lender must know details about your car to determine its value.
Auto refinance lenders handle paying off your existing loan. Once paid off, you begin making payments to the new lender. When you apply for refinance auto loans, consider the reasons you want to refinance.
Once you’re approved and the auto refinance lender funds the loan, they will have a new title issued with their name as the lienholder since the loan funds paid off the existing lien. You’ll receive the title in your name when you fully pay the new loan.
Usually, you begin making payments 30 to 45 days after loan approval, but some lenders offer deferment plans that enable you to skip payments for a month or two. Remember, when you refinance, you start a new auto loan. Pay close attention to the loan term length, as this determines how long you’ll pay interest on the loan. The longer you borrow money, the more interest you’ll pay.
When Should You Refinance Your Auto Loan?
When you refinance car loans, you start from scratch with a new loan, potentially with a longer term, depending on your choice. Here are the top reasons you may need an auto loan to refinance lenders.
You Have a High Interest Rate
If you didn’t shop around for the best rates when you bought your car, you may be paying more interest than necessary for your qualifying factors. This may also happen when you had poor qualifying factors originally but have since improved your income, debt-to-income ratio or credit score.
Applying for an auto loan refinance may result in a lower rate, which means a lower payment and less money overall over the loan term. This is common for borrowers who secured financing from the dealer, as dealers often mark up rates to make a profit.
You Have Better Credit Now
Your credit score is one of the most important factors lenders use when choosing your interest rates. If you had a low credit score when you bought the car but have improved it since then, you may qualify for a lower rate, saving you money.
You may also qualify for a better term. This allows you to repay the loan in fewer months and save more money in the long run. Improving your credit is always possible, as your credit score frequently changes. As it improves, you may qualify for a better auto loan.
You Need a Lower Monthly Payment
If you’re having trouble keeping up with your payments, auto refinance lenders may be able to offer a loan with a longer term. The more time you have to pay off your loan, the less principal you must pay monthly, keeping your payment more affordable.
This increases the total interest you’ll pay over the loan term but reduces the risk of repossession. If your loan doesn’t have a prepayment penalty, you can always make larger payments when you are back on your feet and can afford it again.
Your Current Lender Provides Bad Customer Service
Great loan servicing is a big part of finding the right auto loan. If you have constant trouble dealing with your auto loan lender and it causes too much stress, you may consider finding refinance auto loan lenders that can provide better service for the remainder of your term.
Do your research to ensure you’re dealing with a reputable servicer before switching. TrustPilot and the Better Business Bureau are great resources for evaluating a company’s reviews.
Your Income Increased
You must disclose your income when applying for a car loan, and it determines what rate and loan terms a lender offers. If you’ve had a significant increase in income, you may be eligible for more attractive terms, saving you money over the life of the loan. Just make sure you have ample income history to qualify for the loan before applying.
How To Choose the Best Auto Loan Lenders for You
Consider the Fees
Some lenders charge fees for refinancing auto loans, including origination fees. Paying too much in fees may defeat the purpose of refinancing and not save you as much money as you thought. Look for application, origination, registration, and title transfer fees. Also, determine if your current lender charges a termination or early prepayment penalty.
Evaluate the Available Terms
Consider why you’re refinancing and what term suits your financial situation best. Choosing a shorter term is best to save money over the loan’s lifetime. But a longer term may be necessary if you can’t afford your loan currently. Each lender offers different terms. If you need a longer term, such as 84 months, you may have more limited options, so do your research to see what’s available.
Know the Credit Score Requirements
Each lender requires different minimum credit scores. Know what each lender requires and only apply with those lenders whose minimums you can reach. If you don’t have a credit score above the lender’s minimum requirement, chances are you will get a much higher interest rate than they advertise if approved.
Check for Prepayment Penalties
Some lenders incur prepayment penalties if you pay the loan off too soon. If you plan to make extra payments to pay off your loan early, beware of any penalties lenders may charge, which may make the loan more expensive. Consider your future employment and income possibilities and what you intend to do with the loan. If there’s a chance you’ll pay it off early, look for auto refinance lenders that don’t charge prepayment penalties.
Know the Lender’s Vehicle Requirements
Auto refinance lenders have requirements regarding a car’s age and mileage. Pay close attention to the restrictions to ensure your vehicle meets the requirements. Most lenders require the vehicle to be ten years old or newer and have fewer than 150,000 miles, but check the requirements to be sure.
Auto Loan Refinance Lender Alternatives
If you’re looking for ways to improve your finances, refinancing your car loan is one option, but there are others. Look at the big picture and determine what you need to accomplish to satisfy your financial concerns or reach your financial goals.
Loan Modification
If your car loan is no longer affordable, contact your current lender for options. Lenders don’t want possession of your vehicle and may be willing to offer a longer-term, temporary deferment or another payment arrangement to help you keep up with your payments.
Home Refinance
Your mortgage and car loans likely comprise most of your monthly budget. If you’re looking for ways to save money monthly, refinancing your mortgage may provide a lower payment if you can get a lower interest rate or choose a longer term. You may also be able to tap into the home’s equity, taking the cash out to use for other financial needs.
Personal Loan
If you need cash, you may consider applying for a personal loan, which can be unsecured, meaning it’s not tied to collateral like your vehicle. Because personal loans don’t have collateral, you can use the cash for any purpose and even borrow more than you need to pay off your car loan, using it for other purposes. A downside of personal loans, however, is because of the lack of collateral, you may pay a higher interest rate.
Frequently Asked Questions
Can You Refinance Your Car Loan if You Have Bad Credit?
The better your credit score, the better interest rates refinance auto loan lenders can offer, but you don’t need perfect credit to refinance your car. Car loan aggregators can often help borrowers with bad or fair credit secure a refinance loan. Just be sure it makes sense to refinance when considering the loan’s total costs.
Can You Refinance if You Owe More than the Car Is Worth?
If you’re underwater on your car loan, your loan balance exceeds your car’s value. Most lenders only allow up to 100% loan-to-value ratios, but some may allow underwater financing; you’ll likely pay higher rates and have less attractive terms, but it may help you save your car from repossession.
Is It Better to Refinance With a Dealer or a Bank?
If you originally secured your auto loan financing from the dealer, you may think it makes sense to go back there to refinance. But banks usually offer better rates and terms for car loan refinancing. Many banks offer better rates than what you’ll find at the dealership.
Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. We may earn a commission from partner links on Newsweek, but commissions do not affect our editors’ opinions or evaluations.
