Best Auto Refinance Loans of 2022

Starting APR
Minimum Credit Score 
Loan Terms (range) 
Maximum Loan Amount 

OpenRoad Lending Best Refinance Rates
Not stated
Up to 72 months

Bank of America Best Bank for Auto Refinance 
Not stated 
48 to 72 months

PenFed Credit Union Best Credit Union for Auto Refinance
Not stated 
36 to 84 months 

LightStream Best Online Refinance Loan 
4.99%* with Auto Pay & Excellent Credit
Not stated 
36 to 84 months*

Guide to Choosing the Best Auto Refinance Loan

When to Consider Refinancing Your Auto Loan

While an auto loan refinance can save you money, it’s not the right fit for everybody. You should assess your needs to decide if it’s a good time to refinance your auto loan before you apply. For example, if your credit score has improved or interest rates have dropped, you may be able to secure more favorable terms than your original plan. If you’re having trouble making your monthly payments, refinancing your auto loan can also be an opportunity to lower premiums to meet your budget.

If your credit score is lower than when you initially applied, or if interest rates are much higher, it usually doesn’t make sense to apply for an auto loan refinance. You should only go through with an auto loan refinance if the rates and terms are better than your original loan.

Compare Auto Refinance Loans 

Before applying for an auto refinance loan, you should be sure to compare quotes from multiple different providers. Some factors to take into consideration include:

  • Loan amounts: Most lenders have minimum and maximum loan amount requirements, usually somewhere between $7,000 and $100,000. Make sure that the loan you want to refinance is in between these limits.
  • Rates: One of the main goals of refinancing an auto loan is to lock in lower rates. Make sure to compare rates from multiple different providers to ensure you’re getting the best possible deal.
  • Repayment terms: Whether you want to pay off your loan faster, or need a longer-term length with smaller monthly premiums, look for an auto refinance loan with repayment terms that meet your needs.
  • Credit score requirements: Some lenders have minimum credit score requirements for borrowers. If your credit score isn’t where you want it to be, consider holding off on applying until you raise your score.
  • Car requirements: Not all lenders will issue auto refinance loans for all cars. Make sure that your car meets the requirements of any lenders that you’re interested in.

Apply for Your Auto Refinance Loan

There are a few steps you’ll need to take to apply for an auto refinance loan. Once you’ve decided on a lender, you’ll need to gather all required documents before applying. This can include information about yourself, like your name, address, and social security number, as well as information about your vehicle and your previous loan.

If you’re interested in applying for an auto refinance loan, it’s a good idea to wait to apply until your finances are in order. For example, if your credit score is near a threshold, you might want to take steps to raise your score before applying to qualify for lower rates. Once your application is accepted, you’ll need to begin repaying your new loan. It’s a good idea to set up automatic payments each month to make sure you never miss a payment.

Can You Refinance a Car Loan?

If you aren’t happy with your current car loan, you can refinance into a loan with a different interest rate and new terms. Refinancing a car loan means taking out a new loan that replaces your existing loan. It’s a brand-new loan that you often get from a different lender. Depending on the new lender’s requirements, you might be able to keep the length of the loan the same, shorten it, or extend it.

When you refinance, your new loan amount will generally be the balance you have left on your current loan. However, some lenders allow for a cash-out refinance. Just keep in mind that taking out cash on a car with limited equity could cause you to owe more on the vehicle than it’s worth.

Should You Refinance Your Car?

Whether you should refinance your car loan depends on your situation.

Here’s when it’s beneficial to refinance your auto loan:

  • If interest rates have dropped. Refinancing into a lower rate can reduce the overall interest costs on your loan.
  • If you want to lower your monthly payments. Getting a new loan can help you free up cash for bills and other costs.
  • Your credit has improved since you purchased the vehicle. If your credit score has jumped up since you first purchased your vehicle, you might be able to get a better loan.

Here’s when it’s not beneficial to refinance your auto loan:

  • If you’re going into negative equity. You don’t want to owe more on the car than it’s worth. If refinancing will put you upside-down on your car loan, consider other options.
  • Extending the loan term. Lengthening the term of your car loan typically will cause you to pay more interest over the life of the loan and more for your car. Though longer terms can lower your monthly payment, long-term loans are generally more expensive.

Refinancing your auto loan can help you decrease your payments and the amount of interest you pay over the life of the loan. But whether you should refinance depends on your situation. If you decide that refinancing is the right move for you, seek out a lender and loan terms that meet your needs and help improve your overall financial picture.

When Should You Refinance a Car?

When to refinance depends on your circumstances and needs. Refinancing could make sense if your credit score has recently improved, if car loan rates have fallen, or if you need a lower monthly payment. Overall, consider refinancing when you can get a better deal on your car loan and it won’t cause you to pay more for the vehicle.

How Can You Refinance an Auto Loan?

Each lender has its own process and requirements for refinancing auto loans. However, the steps to refinance are generally similar to taking out an initial car loan. Here’s what the refinance process looks like:

  1. Check your credit report. Fixing any errors on your credit report may help raise your credit score. Lenders largely determine the rate you receive based on your credit, so any improvements to your credit will lead to lower rates and bigger savings on your loan in the long run.
  2. Gather documents and information about your existing loan and your current vehicle.
  3. Shop refinance loans at multiple lenders and get preapproved. Include online lenders, big banks, credit unions, and community banks in your search. Any lender with competitive rates and fees is worth consideration. Remember, credit inquiries within a 14- to 45-day period count as a single inquiry on your credit report.
  4. Decide on a lender. Sign your new contract and send any supporting documents needed, including proof of income.

Can You Refinance Your Auto Loan With Your Existing Lender?

The rules for refinancing an existing loan with the same lender vary by financial institution. PenFed Credit Union, for example, does not allow refinancing for cars already financed with the credit union. Other lenders do allow borrowers to refinance an existing loan.

Keep in mind that it may not always be beneficial to refinance with the same lender. You might find a better deal by refinancing with another institution.

Can You Refinance a Car Loan With Bad Credit?

Yes, several lenders offer auto loan refinance options for borrowers with bad credit. Some lenders don’t even have a credit requirement to get a loan.

When applying for these loans, watch out for high interest rates. Many loans for borrowers with poor credit come with high annual percentage rates that can add significantly to the cost of the loan.


To choose the lenders featured on this list, we evaluated loan offerings from 15 different auto refinance lenders using several criteria. First, we looked at auto loan rates and loan options available to borrowers. We also considered loan amount ranges, loan types offered, availability, repayment term options, and credit score requirements. We also reviewed customer service satisfaction.