5 Best Auto Loan Refinance Lenders (2021)
If you’re having trouble making your car loan repayments or if your credit rating has recently improved, you may want to refinance your car loan. Before doing so, make sure that auto loan refinancing is right for you.
Our team studied the best auto credit industry suppliers. In this guide, we’ll share information on refinancing auto loans as well as recommendations from banks and lenders. If you want to find auto loan refinance deals right away, go to AutoApprouver.com.
In this article:
What Is Auto Loan Refinancing?
Simply put, refinancing an auto loan involves taking out a new auto loan to pay off your existing loan. The reason you can do this is to consolidate your debts with a single lender or to get better loan terms. By refinancing your car loan, you may be able to lower your monthly payments or overall interest. Even if you are not able to get a lower interest rate, you may be able to reduce your monthly payments if you refinance your car loan for a longer term.
Is It Worth It To Refinance An Auto Loan?
It may be worth refinancing your car loan, but it’s not always a good idea – it depends on your particular situation. Consider refinancing an auto loan if any of the following apply:
You are having trouble making your monthly payments. If you are having trouble meeting your monthly car payments either because you budgeted badly when you took out your original loan or your financial situation has changed, you might consider refinancing your auto loan. You can refinance for the longer term to reduce your monthly payments.
You want to consolidate your debts. Sometimes you can improve your credit score by consolidating your debt with just one bank. This would include your auto loan and any other open loans or lines of credit.
Federal interest rates are falling. When the Federal Reserve lowers interest rates, banks can lower the rates they offer customers. You can monitor the federal interest rate on the Federal Reserve website.
Your credit score has improved. The main factor that determines the interest rate on your auto loan is your credit score. If your credit score exceeds 500, 600, 660, or 780, you may be entitled to a lower interest rate. You are entitled to a free copy of your credit report at least once a year. Visit AnnualCreditReport.com for more information.
You think your current car loan is a (relatively) bad deal. If you think your current lender got you a bad deal, you can try refinancing with another company to get a better one. The tables below show the average annual percentage rates (APRs) for auto loans for different ranges of credit scores. The data comes from a 2020 Experian State of the Auto Finance Market report.
| Average prices for new car purchases | |
|---|---|
| Credit score | Average auto loan rate |
| 300 – 500 | 13.97% |
| 501 – 600 | 11.33% |
| 601 – 660 | 7.14% |
| 661 – 780 | 4.21% |
| 781 – 850 | 3.24% |
| Average prices for used car purchases | |
|---|---|
| Credit score | Average auto loan rate |
| 300 – 500 | 20.67% |
| 501 – 600 | 17.78% |
| 601 – 660 | 11.41% |
| 661 – 780 | 6.05% |
| 781 – 850 | 4.08% |
If your rates are above those listed for your credit range above, you may want to consider refinancing your auto loan. Generally, you need to have made at least six to twelve months of on-time payments before you can refinance your auto loan.
5 Best Auto Loan Refinance Lenders
If you are ready to seriously consider refinancing, the next step is to find the best auto refinance lender. The table below recommends five of the best auto loan refinancing companies.
| Auto refinance loan provider | Lowest APR Offered | Refinance auto loan amounts | Terms of office |
|---|---|---|---|
| Automatically approve | 1.90% | $ 7,500 to $ 150,000 | 12 to 84 months |
| PenFed Credit Union | 2.14% | $ 500 to $ 100,000 | 36 to 84 months |
| LightStream | 2.49% | $ 5,000 to $ 100,000 | 24 to 84 months |
| Consumer credit union | 2.69% | Unspecified | 60 to 84 months |
| Auto Express Credit | Unspecified | Unspecified | Varied |
Automatic approval is a good choice if you have a great credit rating. Unlike the other providers on this list, Auto Approve is an auto loan broker. This means that the company will put you in touch with a refinance loan administrator suited to your needs. Automatic approval is a good place to start because you can browse through the offers of several lenders to get an idea of the type of refinance you can expect.
The lowest rate Auto Approve offers is 1.9%, which is among the lowest refinance rates we’ve seen from any lender. To benefit from this rate, however, you must have an excellent credit rating (greater than 780).
Auto Approve is accredited by the Better Business Bureau (BBB), where it has an A + rating and an almost perfect rating of 4.79 out of 5 stars based on over 500 reviews.
| Automatic approval | Automatic counter-approval |
|---|---|
| Low interest rates |
Does not offer loans to drivers with very bad credit or no credit history |
| Strong reputation for customer service | |
| Simple and fast application process |
To learn more about this lender, read our Automatic approval review. You can also start comparing rates by visiting AutoApprouver.com.
A financial institution like PenFed Credit Union is a good place to look for car loan refinance. If you are trying to consolidate your debt, PenFed also offers debt consolidation loans, but with a higher interest rate (6.49% APR).
If your credit rating is low, you may not be eligible to refinance a car loan with PenFed Credit Union because the minimum credit requirements are higher than those of other lenders.
PenFed Credit Union is not accredited by the BBB, but it has an A + rating from the BBB.
| The advantages of PenFed Credit Union | PenFed Credit Union Disadvantages |
|---|---|
| Offers exceptionally low interest rates | Moderate customer service reputation |
| BBB A + rating | Does not offer loans to drivers with poor credit |
| Customer reports describe a slow application process |
LightStream is the auto loan subsidiary of Truist Financial Corporation, the sixth largest bank holding company in the United States. LightStream offers an online loan application. You can apply, pre-qualify, and receive an auto loan in as little as 24 hours. With LightStream, you’ll find flexible payment terms, a straightforward application process, and high loan limits.
LightStream is not accredited by the BBB and has a B rating from the organization. However, very few complaints have been filed against the company in the past three years.
| Benefits of LightStream | Disadvantages of LightStream |
|---|---|
| Offered by a bank with an established reputation | Cannot offer loans to those with little or no credit |
| High loan amount limits | Doesn’t have a great reputation for customer service |
| No charges |
To learn more about this lender, read our LightStream Reviews.
Consumers Credit Union (CCU) was founded in Michigan in 1951. Although there are only 20 CCU banks in the United States, anyone can refinance their car loan by applying online. The bank was named Michigan’s Best Credit Union in 2013 by MiBiz as well as the Best Credit Union to work for by Journal of Credit Unions in 2017, 2018 and 2019.
Consumers Credit Union has an A + rating and accreditation with the BBB. While there are few customer reviews on the BBB website, there are also very few complaints.
| The advantages of consumer credit unions | Consumer Credit Union Cons |
|---|---|
| BBB A + rating and accreditation | Does not offer short-term contracts (60 months minimum) |
| 0.5% rate reduction for CCU members | |
| Strong industry reputation |
Auto Credit Express is a Michigan-based auto loan broker. This means that it partners with financial institutions to offer clients the best loans based on their needs and credit profile. In addition to new and used car loans, the company provides borrowers with auto loan refinancing options.
Auto Credit Express specializes in loans for customers with poor credit and bankruptcies. However, if your credit score is below 560, the company recommends that you increase your credit score before you apply for refinancing.
Auto Credit Express is BBB accredited and has an A + rating. The customer review score is very low at just 1.68 out of 5 stars based on just over 30 reviews. This number represents a small fraction of the total business of Auto Credit Express. On Trustpilot – where Auto Credit Express has a 4.7 out of 5.0 star rating – customers praise the company’s high level of customer service.
| Auto Express Credit | Disadvantages of Express Auto Credit |
|---|---|
| BBB A + rating and accreditation | Mixed online customer reviews |
| Offers financing for customers with bad credit or no credit | |
| Match clients with loans based on credit profile | |
| Offers special rates for military personnel |
Final thoughts on auto loan refinancing
All of the lenders on our list are a good place to look for auto loan refinance. But they are not the only lenders to consider. Be sure to visit local banks and credit unions to discuss your auto refinancing options. It can be more complicated to visit banks in person, but you have the advantage of being able to speak face to face with an expert who can explain your options to you.
If you prefer to see multiple refinance auto loan offers at once, you can do so by clicking below or by visiting AutoCreditExpress.com.