What Is The Best Company to Refinance Your Auto Loan? September 2024

There are a variety of reasons to refinance your auto loan. Perhaps you took out your previous loan with a subpar credit score and have since cultivated a score capable of netting significantly more favorable interest rates. Maybe you’d like to lower your monthly payments by extending the term of your loan or would like to borrow some of your car’s equity for an emergency home repair.

Whatever the reason, it can be time-consuming and daunting to sift through the seemingly endless possibilities to find the best auto refinance company for you. We’ve narrowed down the options to help you make the best choice.

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RateGenius

A super-easy way to quickly narrow down your options is to use an aggregator such as RateGenius. This company brings more than 150 lenders together and matches you with the optimal choice for your situation. It’s a much easier way to absorb nitty-gritty details than juggling dozens of browser tabs. RateGenius also offers handy loan calculators and daily interest rates based on various credit scores. It’s an excellent tool for someone considering an auto loan refi.

Because RateGenius works with such a large number of lenders, the approval process and fees you experience may vary. For example, some lenders will perform a soft inquiry on your credit report during pre-qualification—while others will perform a hard inquiry (which can lower your credit score temporarily). Also, you may pay an origination fee as high as $495 when securing a loan. That’s a hefty price tag considering several other options require no origination fee.

While RateGenius doesn’t specify a minimum credit score, data points online suggest that you’ll need a score in the mid 500s to qualify. You’ll find that to be one of the lower approval standards within the auto loan refinance world.

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Caribou

Caribou works with a large number of lenders to get you the best possible deal for up to $125,000 in auto refinancing. Because of this, it’s difficult to pinpoint details such as exact qualification requirements, borrowing costs, and interest rates, as they vary with each lender.

That said, there are a few things you can know for certain. You’ll need a credit score of at least 620 to be eligible and if you’ve got stellar credit, you can expect to pay as little as 5.99% fixed annual percentage yield (APR). You can also view your pre-qualification offers without entering your Social Security number, which is a rarity among its competitors.

Caribou has great customer support that is available seven days a week. While it’s got a library of helpful resources, contact via live chat, email and phone is also encouraged. If you’ve still got questions, you can book an appointment with a loan officer.

Still, there are some things to watch out for. Most notably, you’ll pay a whopping $399 processing fee. And those living in Massachusetts, Maryland, Mississippi, Nebraska, Nevada, West Virginia, and Wisconsin aren’t eligible.

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Upstart

With a credit score of just 510, you can qualify for an auto refinance with Upstart. That’s really generous. As a reminder, FICO considers scores up to 579 “Poor.” That means if you’ve abused your credit in the past, you might still have a shot at an auto refinance through Upstart.

Those without a credit score may even be eligible. Upstart looks at other factors—such as your level of education and your employment—to decide if you’re a worthy candidate. You may pay a high APR, but at least you might get an offer.

Upstart offers a relatively low loan cap of $60,000. And while that may sound like a good chunk of change, competing lenders offer double this figure.

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LightStream

LightStream is, for several reasons, likely the best option for anyone with credit scores of 670 or above. It provides the ability to borrow up to $100,000 and doesn’t require a down payment or charge an origination fee.

Also, other sites demand that your car be under a certain age or have a specific number of miles on the odometer to qualify for a loan. Not LightStream. The company claims it will refinance a loan regardless.

When LightStream is deciding your interest rate, it examines factors such as your income-to-debt ratio and assets. In other words, someone with a high-600s credit score may fare better than someone with a credit score in the mid-700s.

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Bank of America

Bank of America provides discounts for some borrowers who have an existing relationship with the bank. You can score an interest rate discount of between 0.25% and 0.5%. That’s nothing to sneeze at, and could quite easily translate into many hundreds of dollars in savings over the term of your loan.

Here’s the catch: You’ll need at least $20,000 in daily deposit balances to achieve 0.25% savings and $100,000 in daily deposit balances to save 0.5%. Probably not doable for many, but a solid benefit for those who can swing it.

A big downside with Bank of America is its minimum loan amount. The smallest loan you can take out is $7,500. If you’re looking to refinance a smaller loan, you’re out of luck.

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Consumers Credit Union

To receive an auto refinance with Consumers Credit Union, you must be a member. You can open an account by paying a $5 fee to the Consumers Cooperative Association and maintaining a balance of $5 in either a share or savings account.

Consumers Credit Union offers a 0.25% interest rate discount simply for setting up automatic loan payments. Depending on the term of your loan, this could save you hundreds of dollars.

Similar to RefiJet, you can opt for cash-out refinancing—that is, you can use the equity you’ve built in your vehicle to get a lump sum of money as part of your loan. This is good if you need money for large expenses like medical bills. Just realize that doing this can increase your monthly payments or extend the term of your loan. Consumers Credit Union doesn’t prohibit you from taking a loan despite the age and mileage of the vehicle.

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OpenRoad

OpenRoad is an all-around great choice for someone who needs a lot of help with the auto refinancing process. Because the company exclusively offers auto refinance loans, its agents are experts in the field. It’s also worth mentioning that the site has accessibility tools for those that need it.

You can receive a prequalification with OpenRoad, but be aware that a handful of lenders will perform a hard credit pull which will cause your credit score to temporarily dip. If you prequalify, you will get one offer and rate estimate. This is fewer offers than you’ll get from other sites, but its purpose is to keep you from being hounded by follow-ups from multiple lenders.

Even with a credit score of 500, you can still be approved for a loan. While that’s incredibly generous, scores as low as that may yield an interest rate north of 29%.

Most of the lenders that work with OpenRoad charge an origination fee of up to $199. That’s not as offensive as some competitors, but note that some lenders don’t charge any fee at all.

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Auto Approve

Auto Approve is another service that works to find a lender that best fits your situation—it doesn’t itself issue your loan.

One of its most lauded features is that it manually handles a lot of the details to guarantee you’re getting exactly what you want. For example, instead of blasting your application to tons of lenders, a loan consultant will help you to figure out which Auto Approve partners are your best fit. Then, they’ll submit your application to the lender that you choose. You’ll then be sent an agreement that simply requires an e-signature. Auto Approve will take care of anything else—including getting the title from the DMV. Also, Auto Approve allows you to add cosigners (or co-borrowers) during your refinancing process (with a few exceptions).

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Gravity Lending

Another auto loan aggregator is Gravity Lending, which works with over 70 lenders to find the perfect match for your situation.

Again, each lender comes with its own specific requirements and terms. Unfortunately, you won’t be able to see the exact details of your loan before your application is submitted. When you’re matched with a lender, it will perform a hard credit inquiry to approve you for the loan.

Beyond that, Gravity Lending is very customer friendly. The application process can be completed entirely online; it charges no origination fees; it’s available in every state; the majority of its partners offer a discount when you enroll in autopay. You’ll also be put in contact with a loan officer to give you intimate assistance when you want it.

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Methodology

When deciding on the lenders offering the best auto loan refinance rates, we took into account things like accessibility, available discounts for completing various tasks, initial fees, and loan amount restrictions. We also included options that tout white glove customer service to help those that aren’t confident enough to make such a weighty decision by themselves.

How to select the best auto loan refinance lender

Don’t apply out of your league

Many (but not all) lenders are transparent about the qualifications necessary to receive a loan offer. Whether your annual income would likely prohibit you from an approval, your debt-to-income ratio is sky high, or your credit score is lower than most lenders would like, it’s important to research the details of each before you submit an application. Many allow you to prequalify so that you don’t receive a hard credit inquiry for a doomed-from-the-start application.

Analyze your current auto loan

Remember why you’re refinancing in the first place: To lower your monthly payments and/or interest rate. Make sure you know your goals. Is a smaller monthly payment the single most important thing? You can look for a lender that offers a longer loan term. Though you’ll likely pay more in interest in the long run, it can free up some money for now.

Minimize fees

You may think you’re getting a good deal on an auto loan refi, but if you’re paying high fees, the loan might hardly be worth the hassle. Some common fees to watch out for are origination fees, prepayment penalties, and processing fees. Choosing the wrong lender could result in hundreds and hundreds of dollars in unnecessary expenses.

TIME Stamp: The best auto refinancing depends on your needs and credit

Some lenders are wildly generous with issuing loans to those with bad credit. Others specialize in walking you through the entire refinancing process with a professional. There are also lenders that provide discounts for maintaining sizable deposits at the bank.

Your best choice is the one that complements your current life situation. If you’re just beginning in the world of credit and don’t have much money in the bank, there’s still a loan for you.

Frequently asked questions (FAQs)

What affects your auto refinance rates?

Many factors play into the auto refinance rates you get. Elements such as your credit score, the age and mileage of your vehicle, and the length of your loan are common examples.

When is a good time to refinance your auto loan?

If you see an opportunity to save money, auto loan refinancing can be a good idea. If your credit score has increased significantly and you know you can get lower interest rates—or if you’d like to lower your monthly payments by increasing the term of your loan—consider a refi. Additionally, if you’d like to pocket some of the equity you’ve built in your car for an emergency, you can opt for a cash-out refinance.

Just keep in mind the associated fees, such as processing and origination fees, which can offset a lot of your savings.

How does loan refinancing work?

Auto loan refinancing is a brand new loan on your car with all new terms. The refinancing lender will usually send you a check to pay off your current loan. You’ll then make monthly payments toward your new loan.

Can you refinance a car loan if you have bad credit?

Yes. Some lenders accept applicants with poor credit. However, the interest rates will likely be astronomical, making an auto loan refi a last resort.