8 Best Auto Refinance Companies of October 2022

The best auto refinance companies offer transparent, reliable service to consumers looking for competitive rates from a variety of lenders, including banks, credit unions and non-depository financial lenders.

Your potential savings will be determined by multiple factors — credit score, annual income and the outstanding amount of your current loan — and the importance of each will depend on the individual auto refinance company.

Read on to see our top picks of 2022 and learn how to get the best loan terms that fit your needs.

Our Top Picks for Best Auto Refinance Companies

• LendingTree - Best Marketplace
• RateGenius - Runner-up for Best Marketplace
• OpenRoad - Best for Low Credit Score
• AutoPay - Runner-up for Best for Low Credit Score
• Caribou - Best for Fair Credit
• myAutoloan - Runner-up for Best for Fair Credit
• Lightstream - Best for Any Kind of Vehicle
• Digital Federal Credit Union (DCU) - Best for Newcomers to Credit Building

Best Auto Refinance Company Reviews

Why we chose it: We chose LendingTree as best auto refinance marketplace because, among its approximately 40 lenders, some will consider borrowers with credit scores in the low 500s.

LendingTree is a marketplace of about 40 lenders where you can compare rates for a wide variety of financial products, including auto refinance loans.

The company’s marketplace covers the full spectrum of credit scores. This means that subprime borrowers — people with scores between 580 and 619, also referred to as poor credit — have a chance at refinancing their auto loan through LendingTree’s network.

We particularly liked LendingTree’s Auto Refinance Rates comparison tool, which allows you to input your zip code, loan amount and estimated credit score, and then get examples of potential auto refinance options with terms from 36 to 72 months (with several offers for each term).

LendingTree has offered auto refinance since 2010, and the company’s current roster of lenders covers the entirety of the continental U.S.

Why we chose it: RateGenius has the biggest lender network compared to any other auto refinance specialist in our top picks. Its network serves primarily prime borrowers, so we designated RateGenius second for Best Marketplace.

The auto refinance specialist RateGenius is the flagship brand of The Savings Group, which includes auto finance companies Autopay and Tresl. Its 200-lender marketplace includes credit unions, national banks, regional banks and non-depository financial institutions. The abundance and variety of options makes it more likely you’ll find your best auto refinance rate.

RateGenius is best for a prime borrower, meaning someone with a credit score ranging from 640 to 740, but does provide options for people with credit scores as low as 550. However, co-applicants are allowed, which could help boost your chances of being offered better rates.

You can pre-qualify with only a soft credit pull, but you will see a hard credit check once you formally apply with a lender. Approvals are generally granted within 48 hours of submitting all the required information. RateGenius handles the work of paying off your previous lender, too.

Why we chose it: Few companies that refinance auto loans will work with borrowers with bad credit, but OpenRoad connects customers to lenders that accept credit scores as low as 500.

OpenRoad regularly works with customers with low credit scores (below 600) who have been rejected by other lenders. This company takes the “declines,” says OpenRoad representative Justin Helms, and there are agents available for anyone with questions or in need of guidance.

OpenRoad accepts cars up to 15 years old, which is considerably more flexible than the 10-year industry average. There’s more leeway in mileage, too: Most companies won’t go beyond 150,000, but OpenRoad accepts autos with up to 160,000 miles.

Co-borrowers are also welcomed, and if the person signing on along with you has good or excellent credit, this can bump up your chances for a favorable auto refinance offer.

Why we chose it: AUTOPAY connects subprime borrowers to lenders, which can be a great way for those with bad credit to find the lowest rates and, through consistent on-time payments on their refinanced loan, ultimately improve their credit scores.

AUTOPAY is one of three brands of The Savings Group — along with Tresl and RateGenius. Customers with low credit scores will find more auto refinance options through this company than most, but the conditions (rates and terms) will be less favorable than those offered to prime borrowers. Still, AUTOPAY provides opportunities for those looking to refinance their auto loans while they continue to work on improving the health of their credit.

Cash-out refinance loans and lease buyouts are also part of AUTOPAY’s offerings. Co-applicants on loan applications are also allowed, which is another route to potentially scoring a better offer from its network of lenders.

Like with all Savings Groups brands, once your auto refinance loan is approved and processed, AUTOPAY works with your previous lienholder to ensure the lease is paid off.

Why we chose it: Caribou’s minimum credit score requirement is 650, which falls in the high range of Fair Credit. The company’s marketplace of lenders provides stellar rates for borrowers in this category.

Caribou is a fully online network of lenders, principally credit unions and community banks, where borrowers can access a wide range of partner lenders that refinance auto loans.

Pre-qualification, which only requires a soft credit check and no Social Security number, can provide multiple offers in minutes. Borrowers can apply with a minimum annual income of $24,000 and a credit score of at least 650. While that’s in the high range of the fair credit category, customers save an average of $111.16 per month. The average for annual percentage rate decrease is 6.1%. Additionally, Caribou allows co-borrowers, which could increase your potential savings if that co-borrower has good to excellent credit.

Caribou has a network of auto insurance lenders for car owners who want to change their insurer or add extras to their policy. These add-ons include key replacement, total loss protection with a Guaranteed Asset Protection (GAP) product, Extended Vehicle Protection and cosmetic care coverage for dings, dents, or more.

Why we chose it: We chose myAutoLoan.com as runner-up for best for fair credit thanks to its competitive rates, even for borrowers with credit scores as low as 575.

For the best offers and low rates, myAutoloan.com recommends a credit score of at least 575. The bulk of its customers, company representative Staci Bailey tells Money, have FICO scores ranging from 620 to 680. Borrowers should also have a monthly income of at least $1,800 per month.

The company’s Auto Loan Interest Rate Calculator can give you a good idea of what your APR might look like, and you can use this tool without providing any personal contact information that could result in communication from myAutoLoan about potential offers.

When a customer fills out myAutoloan’s prequalification form, the four offers they receive are guaranteed as long as all of the information you’ve provided is accurate. The rates and terms shown are not just prospective situations but solid offers. This is because, as Bailey explains, myAutoLoan is integrated directly with each lender’s specific loan origination system.

Lease buyouts and cash-out refinance are also part of myAutoLoan’s offerings. For qualified borrowers, a payment deferral of up to 90 days is possible too.

Why we chose it: We chose LightStream as best auto refinance for any kind of vehicle because it places no restrictions in terms of make, model, year, or mileage.

LightStream is one of the few lenders with no vehicle restrictions on its auto refinance loans. There are no limitations in terms of vehicle age, make, model or mileage, so customers can refinance new, used and even classic cars. LightStream also works with other vehicles, like motorcycles and ATVs.

This flexibility is possible because LightStream offers unsecured loans. This means you’ll keep your vehicle title, unlike when purchasing a secure loan. LightStream representatives explained to Money that the company is underwriting the borrower, not the vehicle.

The company’s annual percentage rate starts at 4.99%, which reflects enrollment in autopay. You can get an idea of your potential rate using LightStream’s online rate calculator.

A bonus in working with LightStream is the lender’s commitment to social responsibility. Through its partnership with American Forest, LightStream plants a tree for every loan funded.

Why we chose it: DCU works with borrowers who don’t have strong credit histories. The credit union has representatives to help steer the loan process, which is particularly helpful if you’re new to auto refinance and want guidance.

A fully digital auto refinance experience can be a plus, but for some borrowers, some guidance goes a long way. Digital Federal Credit Union, known as DCU, offers personalized help for auto refinance shoppers who have little-to-no credit history. This can include a phone call from a representative who might suggest adding a co-borrower.

Annual percentage rates start at 4.49%, although this rate will be higher if the customer does not sign up for electronic payments and direct deposit to a DCU account. An extra discount of 0.25% is available to vehicles considered energy efficient, like electric vehicles or cars with a 35 mpg average. Additionally, a 60-day deferment on the first payment is standard for any DCU auto loan refinance.

DCU also works with motorcycles, boats, RVs and ATVs, plus salvaged vehicles, though these do require an appraisal and further investigation. The credit union’s mileage maximum is 200,000, which is a bit higher than other companies — another factor we appreciate about refinancing an auto loan with DCU.

Other Auto Refinance Companies We Considered

iLending

Borrowers with poor credit scores (as low as 510) are accepted by iLending, though most of its customers have a credit score of around 640. The company’s starting annual percentage rate is currently 2.4% with loan terms ranging from 24 to 84 months. We also appreciate that iLending has Spanish-speaking representatives available for those who would prefer to complete the process in Spanish. However, the company’s document fee of $499 is why iLending isn’t in our top picks this month.

LendingClub

The online bank LendingClub almost made our top picks: its annual percentage rate starts at 1.99% and, while its average customer has a FICO score close to 700, the company works with lenders who’ll consider scores in the low 600s. (These numbers were provided to Money by a representative.) However, LendingClub didn’t land in our top picks because its average monthly savings claim of $90 is a little lower than other companies.

RefiJet

RefiJet almost made our top picks for its slightly higher-than-most maximum mileage (150,000), the ability to prequalify with a soft credit pull and its willingness to work with borrowers of all credit tiers. RefiJet isn’t in our top picks only because other companies with even more attractive features bumped it out.

Upstart

Creditworthiness with Upstart is determined not only by your FICO score but 1,000-plus other factors, Auto Refinance General Manager Val Gui tells Money. This can improve a person’s chances of acquiring an auto refinance loan, he explains, because its proprietary AI helps lenders better understand the true risk of working with a borrower.

Because Upstart is still relatively new to auto refinance — the 10-year-old company entered this industry less than three years ago — we’ve decided to leave it off our top picks for now.

Auto Credit Express

Auto Credit Express specializes in helping customers with bad credit or recent bankruptcies or repossessions get better refinance loan rates. The company doesn’t provide any information about APR or loan terms on its site, though, and did not respond to requests for an interview with Money. While its positive customer reviews suggest Auto Credit Express is a good option for auto refinance, its overall lack of transparency kept it out of our top picks.

Auto Approve

Borrowers approved for auto loan refinance through Auto Approve save an average of $148 monthly, company representatives tell Money. To qualify, applicants must have a FICO score of at least 580 and a monthly income of $2,000. These are all positive factors, but the company’s document fee of $488 is a little higher than what’s charged by other companies, and for that reason Auto Approve was bumped out of our top picks.

PenFed Credit Union

Starting annual percent rates for auto refinance via Pentagon Federal Credit Union, also known as PenFed, aren’t as low as other companies. For models from 2021 and more recent, your new interest rate could be as low as 5.24%, while refinance rates for pre-owned vehicles with more than 7,501 miles on a 36-month loan term start at 6.04%.

PenFed claims an average monthly savings of $108 for qualified borrowers. However, the company declined an interview with Money, so we weren’t able to get the details on its criteria for creditworthiness. For that reason, we’ve excluded PenFed from our top picks.

Bank of America

Bank of America’s starting annual percentage rate currently stands at 5.19% for a 60-month loan term, which is higher than many other companies in our top picks.

Capital One

Capital One may require that auto refinance borrowers pay down the balance of their current car loan if their payoff amount is higher than the company’s limits. The lack of information available about starting annual percentage rates also factored into our decision to leave Capital One off the list.

Ally Clearlane

Ally Clearlane requires potential borrowers to go through a pre-qualification process to get information about annual percent rates and loan terms. The company did not respond to our requests for these details, and so we chose to exclude it from our top picks.

Auto Refinancing Guide

Refinancing can give access to better interest rates when your credit history has improved since taking out your current auto loan. However, it’s not a decision to be made lightly, as it may mean additional fees and a hit to your credit score.

How does refinancing a car work?

There are two main ways to refinance your car: traditional and cash-out refinance.

Traditional auto refinance

Refinancing a car generally means taking out a new loan to pay off the balance on your existing auto loan, ideally for a lower rate. Since your original loan is replaced by a new financial obligation, you gain a new APR and new term length.

As an added bonus, your car insurance premiums are likely to go down as well. If you’re looking to change insurers, you can also check out our list of the best car insurance companies.

Cash-out auto refinance

A few auto refinance companies also offer cash-out auto refinances, in which your new loan covers your existing balance and provides an additional amount of money. While a cash-out refinance may have lower interest rates than other options, such as personal loans or credit cards, your monthly payments will go up. This type of loan also has a higher risk of going upside-down.

Auto refinancing requirements

Before beginning the process, it’s important to make sure refinancing is the right solution for you and whether you meet the qualification requirements. Carefully consider the following:

• Your existing loan’s prepayment protocol - Check your existing auto loan agreement to find out if you’ll be penalized for paying early. (This is called a prepayment penalty.) If so, crunch the numbers to see whether an auto refinance makes sense.

• Loan balance versus your car’s market value - Your loan balance is higher than the car’s market value. If you’re “underwater,” or owe more than the car is worth, many lenders won’t consider you for an auto refinance loan. (You can check your car’s value on Kelley Blue Book.)

• Vehicle age and its mileage - Auto refinance lenders have restrictions you’ll have to meet. Many won’t offer loans for cars more than 10 years old or that have over 120,000 miles.

• The status of your current loan payments - Your loan payments should be up to date. If you’re behind on payments, many lenders won’t consider you a viable candidate.

• The balance of your current loan - Each lender has a maximum and a minimum loan amount they’ll refinance. If your loan’s current balance is too low or too high, you may not qualify. Many loan providers also have minimum loan amounts (and maximums) to consider.

• The kind of car you have - Generally, auto refinance companies won’t refinance cars that are “branded,” meaning rebuilt, salvaged or commercial vehicles.

When can you refinance a car loan?

Deciding when you should refinance your loan depends on a number of factors. While a refinance is technically possible even on a new loan, there are some conditions under which it makes the most sense.

Your current deal isn’t great

Thanks to global shipping issues and high demand, and if you didn’t do some careful comparison shopping between lenders or dealerships when you bought your car, your loan may not have the best repayment terms or rates.

For instance, if your current APR is around 20-25%, you might be able to get a better offer by shopping around. This is particularly true if your loan is two years older or more, as many loans with high APRs charge most of the interest amount during that time period.

Your credit score has gone up

An improved credit score will likely give you access to much better repayment terms and lower interest rates.

Your current loan payments are too high

Whether you’ve lost your job or your budget changed, a refinance can lower your monthly payment by extending the loan’s term length. This does mean you’ll pay more in interest over the long run, but sometimes that may be the least bad choice.

How to refinance a car loan

Once you’ve weighed your options and decided a refinance of your current loan is the way to go, follow these simple steps.

7 steps to apply for an auto refinance

1. Check the health of your credit score - If you have good credit, you'll likely get a better deal. This may be a good time to find and dispute any incorrect information in your credit report.
2. Gather all the information about your current auto loan - Having all your information at hand will help speed the application process.
3. Research new lenders and compare rates - While it may take some time, thoroughly researching your new auto refinance lenders and loan offers to find the best auto loan can not only help you compare rates, but also identify any potential red flags. You can also see whether your current lender offers a competitive refinance option, but keep in mind that some lenders will not refinance loans from their own company.
4. File for prequalification - Getting a pre-approval, when available, presents you as a good candidate for a refinance.
5. Submit an application - Once you've gathered all your documents and have chosen a lender, it's time to apply. Many lenders offer an online application.
6. Evaluate the terms - Carefully read the fine print about loan terms. Check whether you can keep your current insurance policy under the new lender’s requirements.
7. Finalize the loan - Remember to keep making your payments on your existing auto loan until the new auto refinance loan is finalized.

Documents needed to refinance your auto loan

To refinance any kind of loan, some documentation is required. These pertain to personally identifiable information, income, residence and your car’s specifications, among others.

Here’s a detailed list:

☑ Social Security number
☑ Employment information
☑ Residence information
☑ Driver’s license
☑ Car registration and mileage information
☑ Proof of insurance

Does refinancing a car hurt your credit?

Refinance lenders typically conduct a soft pull on your credit for pre-qualification, and then a hard inquiry or hard pull on your credit when you actually apply. The former will have no effect on your score, but the latter will drag you down by a few points.

To minimize the drop, make sure to loan shop within a 14-45 day window, as credit bureaus will count these as one single pull.

Unauthorized hard inquiries aren’t unheard of, so make sure the lender is trustworthy. If you find unauthorized inquiries on your report, here’s how to remove negative items on your credit report.

Your credit score will also drop slightly after finalizing the loan because a refinance counts as new debt. Since this new account is effectively replacing an older debt, the credit drop should be negligible, regardless of whether you’re looking at VantageScore vs FICO.

In any case, remember to keep making your payments on your current loan until the refinance has gone through. Otherwise, your credit could be affected. Also, be sure to find out if your new auto refinance lender will pay off the previous auto loan for you or if you’ll need to handle that yourself.

How to refinance a car loan with bad credit

Your credit score should be at least 640 if you hope to get the best rate on auto refi. However, there are cases in which refinancing may be beneficial:

• If auto loan rates have gone down - While new-car rates are different from refinance rates, you may have some wiggle room.

• If your goal is a lower monthly payment - If your main driver to refinance is decreasing your monthly payment, this may mean extending your loan term. The downside is that this will extend the life of the loan, and you’ll therefore pay more in interest as well.

If you’re determined to refinance your car loan despite a spotty credit history, follow the steps outlined above. It may make sense to check out competing offers on a marketplace website such as LendingTree or RateGenius. You may also be able to get better rates with a lender that allows you to add a co-signer to your loan.

Another option is to consider debt consolidation, which can streamline your loan payoff strategy.

Finally, if you can’t find a good deal, taking steps to fix your credit may end up being your best move in the long run. An improved credit score will affect every area of your finances, not just your auto loan refinancing. While most credit repair strategies are possible to do yourself, if the time commitment is too high, you may want to check out our list of the best credit repair companies.

How to refinance a car lease

Refinancing a car lease can reduce the high rates on a leasing agreement. Before deciding, however, consider the pros and the cons:

Auto Refinance in Today’s Economy

It’s not surprising that people are struggling with finances. Recent Census Bureau shows that about 40% of adults are experiencing difficulty keeping up with basic household expenses.

One avenue for potential savings? Auto loan refinance. Many auto refinance companies currently tout a monthly payment drop of about $100, and a few others claim their average customer saves closer to $150.

Monthly new car payments have been affected as well: about 13% pay more than $1,000 per month, almost twice as many people as last year.

Used car prices have gone up too, sometimes surpassing the cost of a newer version of the same make and model.

However, auto refinance remains a viable option. A lot of companies will even work with borrowers with car loans originated as recently as one month ago.

How We Chose the Best Auto Refinance Companies

When looking for the different auto refinance companies in the industry, we considered several criteria.

• Financial stability - We looked at each company’s financial stability to make sure they’d be able to meet their refinancing obligations.

• Loan options - We looked for auto refinancing companies that offered competitive interest rates, zero to no upfront fees and flexible or reasonable vehicle restrictions.

• Customer experience - We looked at each company’s complaints with the Consumer Financial Protection Bureau (CFPB) or the Federal Trade Commission (FTC). We also checked whether each company was transparent regarding its partners, underwriters and fees.

• Financial products - We also took into account each company’s array of financial products and interviewed representatives from some companies.

We also interviewed representatives from companies as part of our research process. Still, though we always try to include accurate and up-to-date information on regulatory and legal actions, we don’t claim this information is complete or fully up to date. As always, we recommend you do your own research as well.

Summary of Money’s Best Auto Refinance Companies of October 2022

• LendingTree - Best Marketplace
• RateGenius - Runner-up for Best Marketplace
• OpenRoad - Best for Low Credit Score
• AutoPay - Runner-up for Best for Low Credit Score
• Caribou - Best for Fair Credit
• myAutoLoan - Runner-up for Best for Fair Credit
• Lightstream - Best for Any Kind of Vehicle
• Digital Federal Credit Union (DCU) - Best for Newcomers to Credit Building