Compare auto loan refinancing offers | finder.com

Compare auto loan refinancing offers

Learn if you can get lower rates and save money.

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For many, auto loan refinancing means saving money every month by changing lenders and searching for a more competitive loan. But it’s not a guaranteed process — even if you are approved for an auto refinance loan, you may not get a better deal that lowers your monthly repayments significantly.

Our top pick: LendingClub Auto Refinancing

  • Min. Credit Score Required: 580
  • Min. Loan Amount: $5,000
  • Max. Loan Amount: $55,000
  • APR: 3.49% to 24.99%
  • Requirements: Car must be less than 10 years old with fewer than 120,000 miles. Current loan must have a balance between $5,000 and $55,000 and at least 24 months left in its term.
  • No origination or prepayment fees
  • Competitive rates
  • Easy-to-use website
  • Check rates without Social Security number

Our top pick: LendingClub Auto Refinancing

Lower your monthly car payments and save on interest through a fast and easy online application process.

  • Min. Credit Score Required: 580
  • Min. Loan Amount: $5,000
  • Max. Loan Amount: $55,000
  • Requirements: Car must be less than 10 years old with fewer than 120,000 miles. Current loan must have a balance between $5,000 and $55,000 and at least 24 months left in its term.
Promoted

Compare top auto refinancing offers

Updated August 23rd, 2019
Name Product Filter Values Minimum Credit Score Loan Term Requirements
Fair or better credit
From 2 years
Car must be less than 10 years old with fewer than 120,000 miles. Current loan must have a balance between $5,000 and $55,000 and at least 24 months left in its term.
Lower your monthly car payments and save on interest through a fast and easy online application process.
3 to 7 years
No past bankruptcies and defaults on loans in the past three years, no loans or credit card payments with 60+ days late over the past two years, credit history of 36+ months, monthly income of $2,000+, US resident, ages 18+
600
Varies by lender
Car must be less than 10 years old with fewer than 150,000 miles. Fair to excellent credit, an income source, US Citizen or Permanent Resident, 18+ years old
Find an offer and get rates from competing lenders without affecting your credit score.
Good to excellent credit
Varies by lender
18+ years old, good to excellent credit, US citizen
Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out.
525
1 to 6 years
Must have an income of at least $2,000/month and have a vehicle with less than 100,000 miles.
A car loan connection service for borrowers looking to refinance.
510
Varies
Income of $2,000+/month, vehicle has less than 150,000 miles and is no older than 8 years, loan balance is between $10,000 and $100,000, debt-to-income ratio is less than 50%
Connect with a network of over 150 lenders to refinance your car loan.

Compare up to 4 providers

How does car loan refinancing work?

Car loan refinancing involves taking out a new loan to pay off your old one, usually with lower rates and more favorable terms.

Refinancing with a new lender allows you to rewrite the terms of your loan. You can qualify for a new interest rate. You can lower your monthly repayments by extending your loan term. Or you can save on interest by shortening the amount of time you have to pay it off.

The new loan amount typically covers the amount remaining on your previous loan, including any prepayment fees or closing costs. When you compare your refinancing options, you’ll want to be looking for the deal that saves you the most money every month and over the life of your loan.

Even if you can’t score a lower interest rate, you may be able to extend your loan term. But this method has its pros and cons. Your monthly payments may be lower, but you’ll often end up paying more in interest than if you’d stuck with your original lender.

For the most part, you’ll be going from one secured car loan to another when you refinance your auto loan. This means that your car will still be held as collateral while you repay the loan, which adds its own risks. If you borrow more than your car is currently worth, you may become upside down on your loan. Auto loan refinancing isn’t the best choice unless you can be sure your new loan will really cost you less.

Look for a better deal on your loan

What should I look for in auto loan refinancing?

Every lender offers different terms and has loans with different features, so don’t let a low potential APR dazzle you. Take your time and compare everything that goes into borrowing, including the lender’s legitimacy and the fees it charges.

  • Loan amount. Make sure that the lender you choose offers enough money to cover your current loan amount. Otherwise, you could be paying more in interest and still having to pay for some refinancing fees out-of-pocket.
  • Interest rates. Check the maximum interest rate the lender charges. This way, you’ll know the highest potential cost of the loan and can better compare it to your current loan.
  • Fees. Ask about the fees a potential lender will charge you — including prepayment penalties, monthly maintenance fees, origination fees — to see if refinancing is worth it.
  • APR. Annual percentage rate (APR) is often considered the best way to compare loan offers, so check your potential refinance offer against your current loan to see which costs less every year.
  • Repayment flexibility. If you’re currently struggling to meet your repayments, ask a potential lender how flexible it is with changing payment dates, automatic payments and late fees.
  • Legitimacy. Read reviews and give customer service a call. If it’s difficult to get a clear answer about rates and fees — or if you don’t get an answer at all — you’ll know it’s best to move on.

When should I refinance my car loan?

You should refinance your car loan if your credit has improved, you have a high interest rate or you can decrease your monthly payments. There are also more reasons to refinance your car loan, so consider these before you start the application process.

However, opting to refinance your car loan isn’t always the most financially sound decision. If your current lender will charge a prepayment penalty for paying off your loan early or your new lender charges fees up front, you may want to calculate the cost of refinancing against the amount you might save.

When you should and shouldn’t refinance

Calculate monthly payments to see if refinancing is a good idea

Can I refinance if I have bad credit?

You can, but you’ll want to make sure it’s a smart financial move. If you borrowed your first car loan at a similar credit rating, you’re unlikely to really lower your interest rate by refinancing. However, if you’ve since raised your credit, you may be able to refinance your car loan and get a better deal.

On the other hand, you can lower your monthly payment by refinancing at a longer term, which could make it easier to repay your loan and start building your credit. But you should make sure you won’t owe more on your loan than what your vehicle is worth. Otherwise, you may be taking on a longer loan term and paying more in interest without really benefiting.

Once you’ve made sure refinancing is the right decision, know that there are lenders that accept borrowers with bad credit.

Can I refinance if I’m upside down on an auto loan?

It’s possible, but it might not be the best idea. If you’re already upside down on your car loan — meaning you owe more for the car than it’s worth — you may have to put up additional collateral to cover the remaining loan balance.

Refinancing can help you turn your car loan around and avoid defaulting. Some lenders even offer loans specifically for this situation. However, not all lenders are willing to work with upside-down loans, so you might want to reach out to customer service first to make sure you’re eligible.

How do I refinance my auto loan?

Once you’re sure refinancing is the right choice for you, it’s fairly easy to refinance your loan.

  1. Review your current loan. Make a list with your lender, remaining balance, interest rate, monthly payment and loan term. This will make the comparing future offers that much quicker.
  2. Check your credit. For most people, it doesn’t make sense to go into the auto loan refinancing process without knowing the score lenders will be seeing. You’re entitled to a free report from each of the major credit bureaus each year, so make sure you get your credit score before you start applying.
  3. Check the value of your car. You can visit sites like Kelley Blue Book or Edmunds.com to see the approximate value of your car. If it’s worth less than the amount you want to borrow, you may have a harder time refinancing.
  4. Compare your options. Get started with our comparison table by making sure you meet the eligibility criteria and are aware of all fees and charges. Once you’ve found a few options, contact the lender directly or visit its website to apply.
  5. Apply for preapproval. Many lenders offer preapproval for auto loan refinancing. This allows you to see the amount you may qualify for before you complete a full application — and take a hit to your credit.
  6. Review your offers. After you’ve received a preapproval offer or two, use our auto loan payment calculator to see if you’ll be saving money by refinancing with a new lender.
  7. Complete a full auto loan refinance application. Once you’ve decided on a lender, you can go through with the application process. The lender may require extra information about your current lender and your vehicle, so be sure you have this handy when you apply.
  8. Pay off your previous loan. Your new lender may do this on your behalf or may require you to organize payoff yourself. Whoever does it, make sure your account with the previous lender is closed.

What will I need to refinance my auto loan?

In order to complete the refinancing process, you’ll need to provide information about yourself and your vehicle, just like when you applied for your original loan. Your lender will typically also request information about your current loan so it can calculate a competitive offer.

Every lender has a different process, but you can generally expect to supply

Information about yourself

  • Full name
  • Date of birth
  • Email address
  • Phone number
  • Residential address
  • Employment status
  • Proof of income
  • Proof of citizenship
Information about your vehicle

  • VIN (Vehicle Identification Number)
  • Current mileage
  • Vehicle make, model and year

Information about your loan

  • Your current lender
  • Remaining loan balance
  • Current loan term
  • Amount you want to finance

Compare car loan refinancing options

Bottom line

Auto loan refinance doesn’t have to be a complicated process. As long as you know how to compare new loans against your current loan, you may be able to find a better deal that lowers your interest rate or monthly repayments — or both. However, you aren’t guaranteed a better deal. Carefully consider all of your options and your current financial situation before applying.

And if you’re not sure where to start, you can always read our guide to car loans to make sure you have everything ready when you start the auto loan refinance process.

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2 Responses

  1. Default Gravatar
    TashaApril 16, 2019

    I’m currently in a balloon rate auto loan and I’m almost certain that I will not be able to afford the last large payment. I have another year and a half left. Can I refinance and if so how soon before the loan is over should I start? My credit is in good status. Please advise.

    • Avatarfinder Customer Care
      johnbasanesApril 17, 2019Staff

      Hi Tasha,

      Thank you for reaching out to Finder.

      1st you may want to talk to your lender on moving out and having another company refinance the loan. This may open up options that may be available to you from your current lender. If that does not work to your advantage, you may then check our page on lenders that may refinance your loan and apply with them. Kindly review and compare your options on the table displaying the available providers. Once you have chosen a particular provider, you may then click on the “Go to site” button and you will be redirected to the provider’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.

      Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. Hope this helps!

      Cheers,
      Reggie

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