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Refinancing your auto loan allows you to secure a lower loan interest rate, duration, or monthly payment. Especially if your credit score is higher than when you initially took out the loan, refinancing an auto loan is one way that you can save money on interest and lower your car payment each month.
The best auto loan refinance banks and lenders offer flexible loans with competitive rates. Lenders typically consider the condition of your vehicle, the size of your loan, your credit score, your current interest rate, and the length of your loan when you apply for an auto loan refinance.
Best Auto Loan Refinance Banks
- Best for Great Credit: LightStream
- Best for Checking Rates Without Impacting Your Credit: Capital One
- Best Trusted Name: Bank of America
- Best for The Most Options: AutoPay
- Best for Members of the Military: USAA
- Best for Peer-to-Peer Loans: LendingClub
- Best Credit Union: Consumers Credit Union
BEST FOR GREAT CREDIT LightStream
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- Starting APR: 6.49%* with Auto Pay & Excellent Credit1
- Minimum credit score: Not stated
- Loan terms: 36 to 84 months*
Why We Chose It
Lightstream is our top pick for auto loan refinancing for borrowers with good credit. The lender offers extremely competitive rates, and loans are available in all 50 states.
Pros & Cons
Pros
- Low rates
- Easy online application process
- Available in all 50 states
Cons
- Application triggers a hard pull on your credit
- Only available to borrowers with good credit
Overview
If you have very good credit, you should take full advantage of it. Whether you’ve had it for years or it’s the product of a lot of hard work and dedication to paying off your debts and increasing your income now is the time to go out and secure a lower interest rate on your car loan. LightStream is a division of Truist Bank that caters to consumers with good to excellent credit. They perform a hard pull on your credit when you apply, so you should be prepared actually to make a decision when you do so. Hard inquiries can cause your credit score to fall slightly, which typically isn’t a big deal, assuming you apply for new credit sparingly. LightStream’s APR starts at just 6.49%, and refinanced auto loans are available in all 50 states.2
BEST FOR CHECKING RATES WITHOUT IMPACTING YOUR CREDITCapital One
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- Starting interest rate: Not stated
- Minimum credit score: Not stated
- Loan terms: Not stated
Why We Chose It
Capital One allows you to prequalify for an auto loan refinance without hurting your credit, making it a great choice for borrowers looking to explore their options.
Pros & Cons
Pros
- Borrowers can prequalify
- Easy online application
- No application fee
Cons
- Minimum loan amount of $7,500
- Must pay a title transfer fee to your state government
Overview
By filling out Capital One’s easy questionnaire, you can see whether you’ll qualify to refinance your loan without impacting your credit score in the slightest. You will need to owe a bit more than some of the other loan refinancing options on this list — at least $7,500 — but you’ll be able to see what sort of rates you’d get and pre-qualify without a hard credit check impacting your credit score. Once you pre-qualify, you submit your credit application which involves selecting the length of the loan and the corresponding APR. This will get posted to your consumer credit report. You’ll finalize the deal by providing your VIN, E-Sign your contract, provide your lender details, and send in supporting documents such as proof of insurance. Capital One does not charge an application fee, however, each state charges a variable title transfer fee. Capital One will pay the fee and add it into your final loan amount, so you don’t have to pay out of pocket at the time of refinancing.
BEST TRUSTED NAMEBank of America
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- Starting interest rate: 5.79% may vary by state3
- Minimum credit score: Not stated
- Loan terms: 48 to 72 months
Why We Chose It
Bank of America is a good choice for an auto loan refinance for borrowers looking to work with an established brick and mortar bank with widespread availability.
Pros & Cons
Pros
- Trusted financial institution
- Quick application decision
- Discount for Preferred Rewards members
Cons
- Car must be fewer than ten years old
- Car must have fewer than 125,000 miles
- Minimum loan amount of $7,500 ($8,000 in MN)
Overview
If you opt for an auto loan refinance from Bank of America, you get a trusted financial institution — and a decision in less time than it takes you to tie your shoes. There’s no fee to apply, and you can help yourself to all of their helpful online tools once you are a member of the Bank of America family. To qualify, your car will need to be fewer than ten years old and have less than 125,000 miles on it, and you will also need to have $7,500 or more remaining on your loan. Bank of America’s current APR for refinancing a vehicle is 5.79%, but it may differ by state.3 It is smart to pay off your existing loan with proceeds from a new loan to take advantage of lower monthly payments, lower interest rates, or save on financing costs. Compare prices and use a car loan calculator to help determine the savings.
Read our full review of Bank of America.
BEST FOR THE MOST OPTIONSAutoPay
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- Starting interest rate: 2.99%4
- Minimum credit score: Varies
- Loan terms: Varies
Why We Chose It
AutoPay offers flexible auto loan refinancing with plenty of options for all borrowers and an average savings of $105 per month.
Pros & Cons
Pros
- Easy application process
- Compare loans from different lenders with just one application
- Average savings of $105 per month
Cons
- Some vehicle restrictions apply may apply depending on the lender
- Minimum monthly income requirements
Overview
AutoPay specializes in auto loan refinancing, so it’s no wonder they offer great deals for many individuals. They often cater to clients who have improved their credit score in the time since they took out their original auto loan, and because of this, they are usually able to offer steeply discounted loans. On their site, you can compare offers for loans from many different lenders without having to fill out more than one application. They also pull your credit with a soft check, which is easy on your credit score and a great option if you are not seriously considering refinancing your loan right this second (once you pick a final offer, they do run a hard pull — but not until you are ready to commit). AutoPay makes it easy to shop around and often partners with credit unions. The lowest rate offered by AutoPay is 2.99% but this is only available if you have a top-tier credit score.4 Knowing your credit score ahead of time makes a big difference in estimating what your APR will be on refinancing a car loan.
BEST FOR MEMBERS OF THE MILITARYUSAA
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- Starting interest rate: Refi rates not advertised
- Minimum credit score: Not stated
- Loan terms: Not stated
Why We Chose It
USAA is a great choice for auto loan refinancing for members of the military and their families, with competitive rates and the option to take your car overseas when deployed, moving, or travelling.
Pros & Cons
Pros
- No payments for up to 60 days
- Easy application process
Cons
- Only available to USAA members
- Borrowers can’t prequalify
Overview
In business since 1922, USAA only works with members of the military and their families, but for those who serve our country, this organization offers rates and customer service that is often hard to beat. You won’t have to pay for up to 60 days after you start the loan, giving you time to catch up if you are behind. USAA takes the hassle out of refinancing by working directly with your lender. While refinance rates are not advertised, their purchase loan rates are very competitive. Rates are subject to change without notice and vary based on approved credit and other factors, such as term, model year, and loan amount.
BEST FOR PEER-TO-PEER LOANSLendingClub
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- Starting interest rate: Must get quote
- Minimum credit score: Not stated
- Loan terms: 24 to 84 months
Why We Chose It
LendingClub offers peer-to-peer loans with multiple options to choose from, low rates, and simple application process.
Pros & Cons
Pros
- Available to borrowers with poor credit
- Flexible loan terms
- Easy application process
Cons
- Minimum loan amount of $4,000 and maximum of $55,000
- Higher rates for borrowers with low credit scores
- Auto refinance is only available in 41 states
Overview
Peer-to-peer lending is a non-traditional option, but it is a great one for those who love the idea of working directly with an individual lender for a fixed period. Once you apply, you can often choose between options and select the one that’s most palatable to you. LendingClub’s auto refinance loans must be between $4,000 and $55,000 which is more restrictive than other lenders. They do offer loans to borrowers with lower credit scores, though of course, you will pay handsomely for the privilege. Only borrowers with excellent credit will be offered the best rates. Many borrowers choose LendingClub because of their low interest rates and less hassle than traditional financing options. They offer a friendly service, and no hidden fees or prepayment penalties.
BEST CREDIT UNIONConsumers Credit Union
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- Starting interest rate: 4.69%5
- Minimum credit score: Not available
- Loan terms: Up to 84 months
Why We Chose It
For borrowers looking to secure an auto loan refinance from a credit union, Consumers Credit Union is a good option, with flexible loan terms and low rates.
Pros & Cons
Pros
- Competitive rates
- Flexible loan options
Cons
- Provides little information on their website
Overview
Unlike many financial institutions, Consumers Credit Union has very flexible loan options, especially if you don’t need to borrow a ton of money. The credit union works with your needs for loan amounts and offers terms from 12 to 84 months. You can check your rate without affecting your credit score. APR is as low as 4.69% on newer vehicles, but this may not be available when refinancing.6
Final Verdict
There are lots of options when it comes to auto loan refinance banks and lenders. Some lenders stand out for their easy online application process, while others excel at providing refinancing options even for borrowers with poor credit. Overall, our top choice for an auto loan refinance lender is LightStream.
For qualified borrowers with good credit and steady income, LightStream offers some of the most competitive auto loan refinance rates. They feature a simple online application process, no restrictions on age or mileage, and funding as soon as the same business day.
Compare The Best Auto Loan Refinance Banks
| COMPANY | STARTING APR | MINIMUM CREDIT SCORE | LOAN TERMS (RANGE) | MAXIMUM LOAN AMOUNT |
|---|---|---|---|---|
| LightStreamBest for Great Credit | 6.49%* with Auto Pay & Excellent Credit | Not stated | 36 to 84 months* | $100,000 |
| Capital OneBest for Checking Rates | Not stated | Not stated | Not stated | $50,000 |
| Bank of AmericaBest Trusted Name | 5.79% | Not stated | 48 to 72 months | Not stated |
| AutoPayBest for the Most Options | 2.99% | Not stated | Varies | Not stated |
| USAABest for Members of the Military | Not stated | Not stated | Not stated | Not stated |
| LendingClubBest for Peer-to-Peer Loans | Not stated | Not stated | 24 to 84 months | $55,000 |
| Consumers Credit UnionBest Credit Union | 4.69% | Not stated | 12 to 84 months | Not stated |
Guide to Choosing an Auto Loan Refinance Bank
When to Consider Refinancing Your Auto Loan
It’s a good idea to think about refinancing your auto loan if your credit score has improved since you first took out the loan. A higher credit score can qualify you for lower rates, saving you money on interest over time. However, you may want to hold off on refinancing a loan if your credit score has gone down.
Compare Auto Loan Refinance Banks
In order to make your auto loan refinance a success, it’s important to choose a bank that meets your needs. Some things to consider when evaluating lenders include:
- Rates: The lower the rates, the more you’ll save on interest. Be sure to compare multiple lenders in order to lock in the lowest rates possible.
- Required credit score: Some lenders have minimum credit score requirements.
- Vehicle restrictions: While some banks and lenders work with all vehicles, others have certain restrictions when it comes to vehicle type, age, and mileage.
- Prequalification options: If possible, look for a lender that allows you to prequalify for an auto loan refinance without affecting your credit score.
- Application process: Look for a lender that offers a simple application process and fast funding.
- Customer service: You should choose a lender with a history of good customer service and high customer satisfaction.
Apply for Your Auto Loan Refinance
Before you apply for an auto loan refinance, you should make sure that your own finances are in order. You should try to establish a high credit score, low debt to income ratio, and a history of stable income before applying for an auto loan refinance.
In order to apply for an auto loan refinance, there are a few documents you’ll need to have on hand. These include personal information like your name, address, and Social Security number, as well as proof of insurance, your current loan and lender information, and your vehicle’s make and model, age, and mileage.
Some lenders may allow you to prequalify and view your loan options before submitting an application. Once you decide on a lender, you can submit your application for an auto refinance loan. In some cases, you could receive funding in as little as one business day.
How Does an Auto Loan Refinance Work?
An auto loan refinance is when you replace your current auto loan with a new one, intending to receive a lower interest rate. Your new loan will pay off the old loan, and you will sign new paperwork, have new terms and conditions, and a new interest rate.
You typically choose to refinance your auto loan if you’re unhappy with the rate or terms, or your credit score has gone up significantly since your original loan. Usually, refinancing is to save money, but keep an eye out for refinancing fees.
What Are the Requirements to Refinance an Auto Loan?
Different lenders have different requirements to refinance an auto loan, but most require that you:
- Wait at least 60–90 days after the original loan so the title on your vehicle has been transferred
- Meet a minimum credit score set by the lender (typically 660 or higher)
- Show proof of income and identification documents
- Have a car under a certain number of miles (some lenders require under 125,000 miles and under 10 years old)
How Much Does it Cost to Refinance an Auto Loan?
Just like each auto lender has different criteria for refinancing an auto loan, they also have different refinance fees. Some auto lenders charge processing and origination fees to do the refinance paperwork, and you may have to pay a prepayment penalty from your original lender. However, other lenders don’t charge any fees, so you will want to find this out ahead of time.
Methodology
We chose the 7 best auto loan refinance banks by first reviewing and researching multiple auto loan refinance banks and then selecting the top contenders. We chose the best options based on credit score requirements, company reputation, available options, rates offered, and more.
