Best auto loan refinance companies for May 2024

Refinancing your auto loan can offer several benefits, such as the ability to pay off your loan faster or save money on interest charges. Whether you’re trying to qualify for a lower rate or refinance to a shorter term, shopping around is the best way to find the best loan for your needs.

We looked at several different lenders and evaluated them according to their APR, minimum credit score requirements, and other relevant factors to arrive at the best auto finance companies on our list.

LendingClub

Lending club offers auto loans starting at 2.99%, though you will most likely need a high credit score to qualify for this rate. You can refinance up to $55,000 with no origination fee, though your car can't be more than 10 years old or have over 120,000 miles. 

Rategenius

RateGenius is not an auto refinance company, but we added them to this list because they are a great resource for those who want to compare multiple lenders in one place, cutting down on research time. You may also qualify for rate discounts and most lenders offer the opportunity to check rates without affecting your credit score. However, you may find that many of the lenders on this platform charge origination fees and you may not be able to choose your payment due date. 

Consumers Credit Union

Illinois-based Consumers Credit Union offers auto loan refinancing for even the most expensive auto loans with flexible repayment terms. There is also an opportunity to knock off 0.25% off your loan if you sign up for autopay. You will need to be a member of the credit union, though anyone can join if they pay a $5 membership fee to the Consumers Cooperative Association.

Capital One

Capital One is one of the biggest banks in the U.S. Capital One offers auto refinancing loans up to $75,000 and pre qualification so you can check what rates you may qualify for without affecting your credit score. Once approved, you can get funding as soon as the next business day.

Lightstream

With Lightstream you can refinance your loan up to 144 months (12 years) depending on the loan type, which may be ideal for those who are looking to lengthen their loan terms. Plus, if you want to borrow a large amount, you can qualify for up to $100,000 and you can qualify for up to a 0.50% auto pay discount, saving you on interest costs. There are no vehicle restrictions unlike many other lenders.

Upstart

For those who may not be able to qualify for a loan with their credit score, Upstart looks at more holistic factors such as your occupation and education level. You don't have to pay an origination fee and will work with a network of lenders to help increase your chances of approval. Unfortunately, Upstart isn't available nationwide.

How does an auto loan refinancing work?

Auto loan refinancing is where you apply for a new auto loan with another lender and use loan proceeds to pay off your existing lender. You'll then only be responsible for the new loan, which can come with a new APR and repayment terms until it’s paid off.

It is similar to many types of personal loan refinancing, except this is specifically for your vehicle. You will need to get a new car title to reflect your new lienholder (the lender who holds your loan). In many cases, the lender will handle this task for you when you refinance. However, some states may require you to register your car again.

When should you refinance your car loan?

You can technically refinance your car loan as soon as the loan information for your existing loan is available. That said, it may not be the best time to refinance depending on your financial circumstances.

Here are some instances when it makes sense to refinance your auto loan:

• Your credit score went up: If your credit score is much higher than when you initially applied for your existing loan, it could be a sign you could get a better deal. It doesn’t hurt to shop around — many lenders allow you to pre-qualify without it affecting your credit score.
• Your existing loan has unfavorable rates and terms: Perhaps your current loan has a high interest rate or a repayment term that’s not what you would have liked. Or, interest rates overall have lowered since you first took out a loan.
• You want to pay off your loan faster: If being debt-free is your goal, then it may make sense to refinance to a shorter repayment term to help you get there.
• You want a lower monthly payment: Wanting to save as much as you can or being able to afford your loan is a good enough reason to want to refinance. You can do so by trying to find a lower interest rate, or by refinancing to a longer repayment term (though you could be paying more interest in the long run).

How to refinance your auto loan

Though each lender has their own specific requirements, here’s generally how refinancing your auto loan works:

• Shop around and decide on a lender: Check your credit score to see what you may qualify for and shop around for lenders that are most likely to offer loans to those with a similar credit profile to yours. Taking the time to shop around and compare rates and repayment terms will help you find a loan that works best for you.
• Gather all necessary information: Once you’ve decided on a lender you want to go with, start by getting what you need to fill out an application. That way, you can help to make the process more efficient.
• Fill out an application: Head to the lender’s website and provide required information, which could include your name, address, Social Security number, and information on your vehicle.
• Submit required documentation: The application may ask for additional documentation that may have to do with your existing auto loan. The sooner you provide them, the sooner the lender can process your application.
• Wait for the lender's answer: Depending on the lender, a decision may be made within a few hours or days.
• Sign closing documents: If approved, your lender will send over closing documents for you to sign. You may also be provided instructions on how to re-register your car unless your lender is going to help you with updating your car title.

Auto loan refinance alternatives

If you don’t want to or can’t qualify for an auto loan refinance, consider these alternatives:

• Pay off your loan early: Those who want to save on interest or be debt-free sooner and can afford it, consider making extra payments instead. Before doing so, check with your lender to ensure there are no prepayment penalties.
• Trade in your car: If you can’t afford your current loan payment, one option may be to trade it in for a less expensive vehicle. That way your loan amount is lower, which will lower your monthly payments.
• Ask for a loan modification: You can work with your lender to modify your loan terms, especially if you can prove that you're struggling financially. You may have to work with the loss mitigation department to see what they can do to help make your loan payments more affordable.

Methodology

We looked at over a dozen auto finance companies and did comparisons based on the following factors:

• Cost of loan.
• Accessibility and eligibility.
• Customer service.
• Loan details (including rates and terms).
• Ease of application.

We look at the specifics of these factors (such as APR, fees and discounts) to arrive at which ones we felt were best for our readers.

Frequently asked questions (FAQs)

When can you refinance a car loan?

You can refinance a car loan at almost any time, though it’s usually best when your credit score has improved, interest rates have lowered overall, or you’re trying to reach financial goals such as becoming debt-free faster.

Can you refinance a car loan with bad credit?

While it may be possible to refinance a car loan with bad credit, you may not qualify for the most favorable rates. Plus, the rate you qualify for may be higher than what you currently have.

Does refinancing a car hurt your credit score?

If you submit a full application to refinance your car, the lender may conduct a hard credit inquiry which can affect your credit score. However, it is usually only temporary and may not have a massive effect on your score compared to other factors. You can minimize the effect of your credit score being affected by submitting applications within a short time span — credit bureaus will count these as a single hard inquiry.

What is the best credit score to refinance a car?

There is no best credit score in order to refinance a car, though the higher your credit score, the more likely you’ll be approved at the lowest rates.

Is it best to refinance with my current auto lender?

It may be a good idea to refinance with your current auto lender if you’re able to negotiate better rates and terms. In an effort to keep your business, some lenders may be more willing to work with you to see what you can qualify for.