Refinancing your auto loan can help you get a lower interest rate, extend your loan term or borrow cash based on your car’s equity. All of these options can help put you in a better financial position. We’ve put together a list of the best auto loan refinance lenders so you can find the best option for your situation.
Our top auto loan refinance recommendations
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Navy Federal Credit Union |
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Caribou: Best for customer support
Pros:
- Customers save around $115 a month on average according to the company website.
- Add-on services available.
- Low starting APRs.
- Offers prequalification with a soft credit pull.
Cons:
- High processing fee.
- Not available in Maryland, Mississippi, Nebraska, Nevada and West Virginia.
Caribou’s strength is its customer service. The company works with a network of lenders to get you the best possible deal, and you have the option of communicating with the team using whatever method you’re comfortable with: email, text or phone call. The provider also offers several add-on services like extended protection, key replacement, GAP coverage and a cosmetic care package.
LendingClub: Best for small refinance loans
Pros:
- No origination fees or prepayment penalties.
- Low minimum credit score.
- Fast funding available.
Cons:
- Low maximum loan amount.
- Not available in Alaska, Hawaii, Maine, New Hampshire, North Dakota, Vermont, West Virginia, Wyoming, the District of Columbia and the U.S. territories.
LendingClub offers auto refinance loans starting at $4,000, which is the lowest minimum limit on this list. This feature makes LendingClub a good choice for car owners who need to borrow a small amount. However, the maximum loan amount is also low — so you may need to go elsewhere if you want to borrow more. Additionally, loans are only available in 42 states.
LendingClub earned an A+ from the Better Business Bureau and a strong Trustpilot score of 4.7 out of 5 stars.
Upstart: Best for borrowers with thin credit
Pros:
- No application fee or prepayment penalties.
- Flexible lending criteria.
- Offers prequalification with soft credit pull.
Cons:
- No co-borrowers allowed.
- High minimum loan limit.
Upstart doesn’t set a credit score requirement to qualify for an auto refinance loan, making it a good choice for borrowers who either lack a credit history or have a low credit score. Upstart does review your credit profile, but it can use other factors like your education level and employment status to decide if you qualify. A thin or spotty credit history may result in paying a higher APR, but you still may get an offer.
We also like the strong Trustpilot customer service reviews, which point to a quick and easy application process. However, some reviewers on the Better Business Bureau’s website reveal problems with protecting consumer information and getting payments correctly applied to loans.
LightStream: Best for flexible lending criteria
Pros:
- No fees.
- High loan limits.
- Flexible lending requirements.
Cons:
- Prequalification isn’t available.
- Poor customer service reviews.
Most auto loan refinance providers set model year, mileage and usage requirements for the car you’re refinancing. But LightStream doesn’t impose these vehicle restrictions, making it a good option if you want to refinance an older car with a higher mileage count. We also like that LightStream doesn’t charge fees and sets high loan limits and long loan terms.
Even with all these benefits, there are some downsides to consider, including negative customer service reviews with Trustpilot and the Better Business Bureau. And while you can estimate your loan offers on LightStream’s website, you won’t be able to do a prequalification.
RefiJet: Best for longer repayment terms
Pros:
- Offers prequalification with a soft credit pull.
- Strong customer service.
- Cash-out refinance available.
Cons:
- You’ll need to call the company for a prequalification.
- Origination fee.
RefiJet’s repayment terms go all the way up to 96 months, which is the longest term available on this list. Long repayment terms lower your monthly payments because they’re spread over a longer time frame. This helps put room in your budget so you can focus on other financial goals while you pay down your car loan. However, keep in mind that you’ll typically pay more interest over the life of a longer loan.
We also like the customer service RefiJet provides. The company aggregates information from 20 lenders to help you check options, and you can contact a financial services representative to help you make a decision. However, you’ll pay an origination fee when you refinance with RefiJet, and you’ll need to call the company to do a prequalification.
RefiJet earned an A+ grade with the Better Business Bureau and a Trustpilot score of 4.6 out of 5 stars.
PenFed Credit Union: Best for debt protection services
Pros:
- Low APR range.
- Offers debt protection service.
- Offers prequalification with soft credit pull.
Cons:
- Can’t use the loan to refinance an existing PenFed auto loan.
- Must join credit union during application process.
PenFed Credit Union offers debt protection services that can provide a safety net for you. If you die, become disabled or get laid off from work, the Debt Protection program may cancel your loan balance or monthly loan payments without penalties or added interest.
PenFed also charges some of the lowest APRs in the industry and a high loan limit of $150,000.
One downside to consider is that you’ll need to join the credit union when applying for the refinance loan. Membership is open to anyone in all 50 states; you just need to open a savings account and deposit at least $5.
PenFed has earned a strong reputation; it has an A+ grade from the Better Business Bureau and a Trustpilot score of 4.4 out of 5 stars.
Capital One: Best for poor credit
Pros:
- Low APR range.
- Low credit score requirement.
- No application fees or prepayment penalties.
Cons:
- Can’t refinance a Capital One auto loan.
- High minimum refinance amount.
Capital One says it accepts credit scores as low as 540, so it may be a good fit for borrowers with poor or fair credit. Another provider on this list, Upstart, also has flexible lending criteria. But Capital One offers a lower APR range, which can help you save money if you have a weak credit history.
The bank also offers top-notch customer service. In J.D. Power’s 2023 U.S. National Banking Satisfaction Study, Capital One took the No. 1 spot for overall customer satisfaction for the fourth year in a row.
However, the minimum loan limits are a bit high, and you won’t be able to refinance with this provider if you have an existing Capital One auto loan.
MyAutoLoan: Best for a quick application process
Pros:
- No maximum loan limit.
- Fast turnaround time.
- Allows co-signers.
Cons:
- May result in multiple contacts from different lenders.
- Limited customer support available.
- Not available in Hawaii and Alaska.
MyAutoLoan works with many refinance lenders to find you the best deal, and we love that it offers a quick funding process. After you do a prequalification with a soft credit pull, you can get up to four loan offers within minutes. Each lender has its own eligibility requirements, but borrowers can typically qualify with a credit score of around 600. If you decide to move forward with the application and you’re approved, you can receive your funds within 24 hours. This is a faster turnaround time compared to many other lenders.
The biggest drawback to working with this company is that you may be contacted by multiple lenders as they try to earn your business. There’s also limited customer support available through MyAutoLoan, though you may get more help with the lender you choose.
Navy Federal Credit Union: Best for no loan limits
Pros:
- No loan limits.
- Low APR range.
- Long repayment terms.
- $200 bonus available.
Cons:
- Membership limited to military members.
- Minimum loan of $30,000 for longest repayment terms.
Auto loan refinancing with Navy Federal Credit Union starts at $5,000 and has no upper limit, making it a good choice for borrowers who need to borrow a large amount. With long repayment terms and a low APR range, though, it’s a good choice for anyone refinancing a car loan. The credit union is also offering $200 to qualifying borrowers who refinance a car loan from another lender.
The major downside is the membership requirement — you’ll need to be a member or join the credit union to apply for an auto refinance loan. Membership is open to anyone with ties to the armed forces, Department of Defense or National Guard.
Navy Federal Credit Union has earned a Trustpilot score of 4.5 out of 5 stars based on nearly 27,000 reviews.
RateGenius: Best for comparing options
Pros:
- Advertises average daily rates by credit score.
- Rate discounts available.
- Some lenders offer prequalification with a soft credit pull.
Cons:
- Origination fee.
- Some lenders may do a hard credit pull for prequalification.
RateGenius is a loan marketplace that works with more than 150 lenders to pull in multiple auto loan refinance offers. You start with a prequalification, which is done with a soft credit pull, and view several offers side by side. This feature can help you save time and find the best deal you qualify for. Some of the lenders within the network accept credit scores as low as 550, so it’s a good option if you’re looking to refinance with bad credit.
RateGenius earned an A+ grade with the Better Business Bureau and a Trustpilot score of 4.2 out of 5 stars.
How we chose the best financial institutions to refinance an auto loan
An auto loan refinance can help you meet your financial goals, whether it’s to reduce your monthly payment or tapping your car’s equity to borrow cash. But with so many loan providers out there, it can be difficult to choose the right one. We compiled a list of providers that offer different features, flexible lending criteria and, generally, a good product. The financial institutions on this list:
- Accept poor credit, fair credit or good credit.
- Offer relatively low interest rates.
- Allow you to choose from several repayment terms.
- Have a wide loan amount range.
- Earned a strong reputation for customer service.
- Fund your loan quickly.
How does refinancing a car loan work?
Refinancing involves applying for a new auto loan that replaces your current one. The main goal is to change the loan terms. For instance, you may qualify for a lower interest rate that helps you save money or extend your loan term to lower your monthly payments. Once you sign the loan documents, the lender may pay off your old loan directly or send you the money to do it yourself. The refinance provider may also transfer the title and file any other necessary documents. You’ll then start making payments on the new loan, based on the terms with the new lender.
Related: When should you refinance your car loan?
Choosing the best auto loan refinance provider: Where to begin
Here are the steps you can take to choose the best auto loan refinance provider for your situation.
Review your current auto loan
Check the interest rate, the number of months left on the loan term and the amount needed to pay off your existing loan. Also look for a prepayment penalty, which is a fee for paying off the loan early. Use all of this information to check whether your new loan offer is better for your situation.
Check the provider’s reputation
You can use third-party review websites, such as the Better Business Bureau and Trustpilot, to get a feel for customer feedback.
Look through the lender’s offerings
Check loan limits, APR range and loan terms to see if the lender has what you need. Also, check whether the lender charges fees and which ones may apply to you.
Review the lender’s requirements
Check the lender’s website for a list of eligibility criteria, such as a minimum income, credit score, debt-to-income ratio and car value. You’ll need to know whether you fit the lender’s general qualifications to receive a loan offer.
Do a prequalification
Many lenders use a prequalification tool on their website, which requires you to enter a few pieces of information and consent to a soft credit pull that won’t affect your credit. The lender uses this information to determine your offers.
Pros and cons of refinancing car loan
An auto loan refinance may save you money or put room in your budget. But before refinancing, consider your goals and whether you’re OK paying any related costs. Here are some pros and cons to consider.
Pros:
- Save money on interest: If your credit score has improved since you took out the original car loan, you may qualify for a lower interest rate through refinancing. The lower rate may save you enough interest over the remaining term to make the refinance worthwhile.
- Lower monthly payments: When you refinance, you can choose to extend your term and lower what you pay each month. While you often pay more interest with this option, it can free up funds to pay for necessities or prevent you from falling behind on auto loan payments.
- Borrow cash: Some financial institutions allow you to do a cash-out auto refinance, where you take out a car loan for more than you owe and keep the difference in cash.
- Add or remove a co-borrower: Refinancing also allows you to add or remove another person from the auto loan contract.
Cons:
- May cost more in interest: If you refinance into a longer loan term or receive a higher interest rate, you’ll likely pay more interest than you would have with the original loan.
- Additional fees: Some financial institutions charge upfront costs, like application or origination fees, to process the refinance loan. You may also have to pay state and local fees to re-register your car or transfer the title.
- May become upside-down: Refinancing to borrow cash will drain your equity. You could wind up in a position where you owe more on the loan than the car is worth, known as being “upside down” on your car loan. If you decide to sell the car, you’ll need to pay the difference.
Frequently asked questions (FAQs)
Is it best to refinance with my current auto lender?
Refinancing with your current auto lender could be a good idea if it offers what you need, whether that’s a lower interest rate, longer loan term or the ability to borrow cash. Some lenders may provide discounts or other incentives to existing customers, too. But it’s always a good idea to compare offers from multiple lenders to make sure you’re getting the best deal.
What is the safest place to get an auto loan?
Banks, credit unions, online lenders and dealerships all may offer auto loan refinancing. The safest place is one that has a strong reputation, is transparent about its requirements and clearly lists all costs of the loan before you sign the contract.
What happens when I refinance a car loan?
When you refinance, you replace your current auto loan with a new one. The old loan is paid off, and the title transfers to your new lender. Then you start making payments on the new loan.
Can I refinance a car loan with bad credit?
Yes, some lenders work with borrowers who have poor credit. But you’ll likely pay a higher interest rate since the lender is taking on more risk.
How soon can you refinance an auto loan?
Once you take out an auto loan, you’ll typically need to wait at least 60 to 90 days to refinance the loan. That’s the minimum time frame for transferring the car title from the previous owner to your current lender. Once this process is complete, you can refinance the loan if you find a better deal.
Does refinancing your car hurt your credit?
Refinancing may impact your credit in a few ways. First, the financial institution will likely do a hard credit pull when you submit an official application. The credit check can temporarily lower your credit score by a few points. Next, the new loan will lower the average age of your credit accounts, which can also decrease your score. You also increase your debt load, which has a negative impact on your debt-to-income ratio. But if you consistently make on-time payments on the new auto loan and your other obligations, your credit score can rebound.
