Best Auto Refinance Companies
- Below-average credit scores accepted
- Great interest rates
- Smooth and easy online experience
- Great for customers with limited/no credit
- Offers special military rates
- A+ BBB rating
- No application fee
- Lending platform that partners with banks
- Approval and loan terms based on many variables, including education and employment
- Average savings of $111/month
- Secure, fully online platform
- Refinancing available for cars, trucks, & SUVs
- Average monthly savings of $145
- Online Application
- Browse loan options found specifically for you
All APR figures last updated on 3/3/2023 – please check partner site for latest details. Rate may vary based on credit score, credit history and loan term.
After researching the top auto loan providers, we’ve discovered the top 3 best auto refinance companies. In this article, we’ll also go over if you can refinance your current auto loan, whether you should and should not pursue refinancing a car, and how to go about vehicle refinancing. We’ve also created a guide to auto loans to help you with any of your vehicle financing needs.
Key Takeaways
- The best place to refinance an auto loan depends on your unique financial situation.
- Even if you have bad credit, you can get refinancing for a car and there are many different types of lenders able to assist you.
- Whether you should pursue refinancing a vehicle loan depends on current interest rates, the vehicle you are financing, and your unique financial situation.
What Is the Best Auto Refinance Company?
The best auto refinance company based on our analysis is Auto Approve due to its good mix of affordable rates and great customer service. Both PenFed Credit Union and myAutoloan also offers some of the best refinancing services for cars.
Compare Auto Refinance Loans
If you’re looking to refinance a car loan, each of these providers is known for quality customer service and highly competitive rates. In the table below, we’ll highlight key loan terms relating to each company:
| Refinance Car Loan Lender | Lowest APR | Term Length | Loan Amount | Award |
|---|---|---|---|---|
| #1 Auto Approve | 5.24% | 12-84 months | $5,000-$85,000 | Best For Refinancing |
| #2 myAutoloan | 4.01% | 12-84 months | $5,000-$100,000 | Best Auto Loan Marketplace |
| #3 PenFed Credit Union | 5.19% | 36-84 months | up to $150,000 | Best Credit Union |
*Note that the overall ratings shown are for the company’s overall services, not just refinancing. Rates shown are current as of 6/5/23.
Best Car Refinance Companies
While myAutoloan offers the lowest rates for auto refinancing, the company may not be the best option for your needs. Since it is an auto loan broker, you’ll be dealing with multiple companies which can be overwhelming but it can be good for comparing loan options. On the other hand, having personalized service from start to finish with a company like Auto Approve may suit you better.
To help you with your decision, we’ll be breaking down our top picks for vehicle refinancing and their loan terms. In addition to this, we will also provide customer reviews and the pros and cons of choosing each lender. Below we will detail the companies with the best auto refinance loans on the market.
#1 Auto Approve: Best For Refinancing
Starting APR: 5.24%
Loan amounts: $5,000 to $85,000
Term lengths: 12 to 84 months
Application fee: None
Auto Approve specializes in refinancing auto loans, and its annual percentage rates (APRs) are typically quite low. Between its relatively low-interest rates and strong customer service, Auto Approve earned the title of Best For Refinancing from our review team.
While many reputable refinancing providers only lend to borrowers with strong credit, Auto Approve considers those with low credit scores as well as they do not require a minimum credit score for approval. So, if you have a fair or bad credit score myAutoloan can help you get approved and find a loan without too many restrictions.
Auto Approve Reviews
The company’s customer satisfaction is high, as seen by its average rating of 4.6 stars out of 5.0 from more than 7,000 Trustpilot reviews. Auto approve also has an A+ rating from the BBB and is an accredited organization. Customer reviews on the Better business bureau website are also overwhelmingly positive with a score of 4.35 out of 5.0 stars based on 475 reviews. Many customers spoke about their loan department’s great service reps and how they were able to get much lower rates due to the company’s help.
Pros and Cons of Auto Approve
| Auto Approve Pros | Auto Approve Cons |
| Stellar customer satisfaction | Some mentions of poor communication with agents |
| Typically offers low rates | |
| Considers borrowers with fair credit |
#2 myAutoloan: Best Auto Loan Marketplace
Starting APR: 4.01%
Loan amounts: $5,000 to $100,000
Term lengths: 12 to 84 months
Application fee: None
Rather than a lender, myAutoloan is an online marketplace that connects borrowers with lenders. While borrowers don’t get refinance car loans directly from myAutoloan, the company works with providers to offer the low refinancing rates and flexible loan terms.
Applicants must have at least a 575 credit score which makes it easier to qualify for auto refinancing. However, only those with excellent credit are likely to be eligible for the best refinancing rates.
myAutoloan Reviews
The lender has a 1.0 out of 5.0-star rating from customers on the Better Business Bureau website, but this is only based on five total reviews. However, on Trustpilot, the company has a 4.1-star rating out of 5.0 stars from borrowers and the vast majority of the reviews are positive. Many of the customers talk about how easy the process was to get a loan and how secure they felt using their services.
Pros and Cons of myAutoloan
| myAutoloan Pros | myAutoloan Cons |
4.2-star customer review rating on Trustpilot |
Not an actual auto lender |
| Easy to compare loan offers | |
| Plenty of vehicle refinancing options |
#3 PenFed Credit Union: Best Credit Union
Starting APR: 5.19%
Loan amounts: $500-$150,000
Term lengths: 36 to 84 months
Application fee: None
Vehicle owners hoping to refinance a car loan should look for providers that are credible, offer some of the lowest rates around, and get plenty of great customer reviews. Pentagon Federal Credit Union, commonly known as PenFed, suits all of those needs, making it an excellent choice for auto refinancing.
Those with low creditworthiness are likely to have auto refinancing denied by PenFed Credit Union, though, as it requires a minimum credit score of 610. The organization’s membership is largely made up of military members and veterans, but anyone can join by opening a savings account with $5.
PenFed Credit Union Reviews
Reviews on both Trustpilot are positive with 90% of the reviews being over 4 stars giving them a score of 4.6 out of 5.0 stars from over 1,000 customers. On the Better Business Bureau website it is a different story and 233 customers rate the company 1.19 out of 5.0 stars. The company also has a BBB rating of an A+, but they are not accredited. Their fast approval and affordable rates stand out as one of the most common things mentioned about their lending services.
Pros and Cons of PenFed Credit Union
| PenFed Credit Union Pros | PenFed Credit Union Cons |
| Reasonable starting APRs | Stricter credit requirements |
| Strong customer service | |
| Benefits for members |
How To Refinance Your Car Loan
There are four best steps you should take when you are looking to refinance a car loan:
#1 Collect Important Documents And Information
When looking to refinance a car loan, you’ll need to provide personal and financial information such as your rent or mortgage payments, Social Security number, proof of income, and proof of car insurance.
You’ll also need your vehicle identification number (VIN), as it gives potential lenders details about your car. Look for records of your current auto loan since you’ll need to know your monthly loan payments, the balance of the loan, and the loan term.
#2 Apply To Refinance Your Car Loan
Keep in mind that if you have multiple hard credit checks within 30 days as you shop for a new auto loan, FICO will count them as a single inquiry. That means rate shopping won’t impact your credit report more than once. Financial institutions such as banks, credit unions, and online lenders provide auto refinancing, and many have online loan applications.
#3 Compare Loan Offers
Once you receive options to refinance your auto loan, consider the terms that have been offered. Depending on the lender and your situation, you may be offered a different repayment period, a lower APR, or both. Compare refinancing options before choosing a lender, as some will suit your needs better than others.
#4 Finalize Loan Details
You’ll need to pay any penalties or fees associated with your old loan if you decide to refinance for a new auto loan. It’s also important that you sign all documents regarding the new car loan. Once the auto refinance process is complete, stay on top of payments to continually improve your credit score throughout the term of the loan.
Where Can I Refinance My Car Loan?
Refinancing a loan on your car can be done with your current lender or another provider including banks, credit unions, online lenders, and dealerships. Below is a breakdown of each of your options when considering auto refinancing:
- Traditional Banks: Most regular commercial banks offer a variety of services for auto loan refinancing and usually have the most options compared to other providers. Since these lenders are more established, many of them have easy-to-manage online services.
- Credit Unions: These types of loan providers are like banks, but instead are member-owned and are considered non-profit. Credit unions tend to have some of the best refinancing rates on the market, but you need to be a member and they have stricter requirements than other choices.
- Online Lenders: Some financial service providers are completely online and are done through third parties. Usually, the draw to these loan-related services stems from fewer fees being charged and comparison tools that make finding low rates easier.
- Dealerships: While usually used and new car purchase loans are done here, it is still possible to refinance a vehicle at a dealer. It may be possible to use a dealership’s lending network to find a suitable refinance loan provider for your needs.
Should I Refinance My Car Loan?
Whether you should refinance a car loan depends on a variety of factors including your credit score, how far you are into your current loan, your vehicle’s value, and market interest rates. Refinancing an auto loan can be an excellent way to free up access to money through a reduced APR and a lower monthly payment. However, even if they secure lower rates, they may end up paying more overall if they choose longer terms. That’s because extending a loan term means the borrower will pay more in interest over the life of the loan.
Source: Capital One
Many drivers keep more money in their savings accounts when they refinance a car loan, but using an auto loan calculator can help you determine if it’s right for you. We’ll explain when refinancing may be a solid option and when it may be better to keep your current car loan.
When Should I Refinance My Car Loan?
Below are situations when refinancing an existing loan could be beneficial:
When Your Credit Score Has Improved
If you’ve seen a boost to your credit score, you may be approved for a lower interest rate. Auto lenders are more willing to offer competitive rates to those with high credit scores, as they prefer lower-risk borrowers over those looking for bad-credit car loans.
When Your Car Is Worth More Than The Loan
You’ll likely be able to reduce your interest rate when you refinance a car loan on a vehicle that’s worth more than you owe on it. That’s because lenders strongly consider loan-to-value (LTV) ratio when assessing the potential risk of each applicant.
When Interest Rates Have Decreased
If interest rates are significantly lower now than when you took out your car loan, there’s a good chance you could get a better rate by refinancing. Prequalifying with lenders can help you find out whether you’re eligible for lower interest rates than what your dealership or financial institution initially offered.
When Should I Not Refinance My Car Loan?
Below are a few cases where you should not refinance your current auto loan:
You Owe More Than Your Car Is Worth
It’s extremely unlikely that you’ll get approved for a lower APR if your vehicle is worth less than your existing auto loan, a position known as being “upside-down.” If you apply to refinance a car loan that’s upside-down, you could receive a ding to your credit only to learn your interest rate won’t drop.
Your Auto Loan Has A Steep Prepayment Penalty
When you refinance a car loan, your old lender misses out on interest it otherwise would have gained in future months. To combat these losses, some lenders add prepayment penalties to loan contracts. If the prepayment penalties mentioned in your current contract’s disclosures are high, you may lose money even if refinancing gets you a lower interest rate.
Your Car Loan Is Almost Paid Off
Auto lenders commonly front-load interest, so most of your payment typically goes toward principal around the end of your contract. If you refinance a vehicle loan after making a sizable down payment or nearly paying the balance off, you’ll probably see your credit score dip in return for an interest rate similar to what you’re already paying.
Best Companies to Refinance Car Loan: Conclusion
We’ve highlighted some of the best car refinancing lenders with affordable rates and great benefits. Regardless of your situation, you can refinance your vehicle and there are many great options for you to get refinancing for an auto loan. While it can be a great way to get better rates and terms, there are some situations where it is best to stay away. If you decide it is a good option, we recommend that you shop around and compare rates to find the best lender for you.
Best Place to Refinance Car: FAQ
Below are some frequently asked questions related to the best auto refinance rates:
What is the best place to refinance a car loan?
Based on our research, the best place to refinance your car loan is Auto Approve, which we awarded as best for refinancing. The company specializes in refinancing auto loans and typically offers some of the lowest rates on the market.
What should you look for in auto refinance companies?
When comparing auto refinancing companies look for low APRs, great customer service ratings, and flexible loan terms. We recommend comparing at least three lenders before making a decision.
Who has the best auto refinance rates?
Currently, the best auto refinance rates are offered by the online lender myAutoloan at a starting interest rate of 4.01%. However, this is reserved for those with the highest credit scores and loan term of 36 months or lower. myAutoloan is also an online vehicle loan marketplace so the deals you get vary by lender.
Is refinancing a car worth it?
Auto loan refinancing is often worth it, but this depends on your situation. It’s smart to refinance a car loan if your vehicle is worth more than you owe, if auto loan rates have dropped, or if you’ve improved your credit score since getting your original loan.
Where can I refinance my car loan?
You can refinance a car loan at most banks, credit unions, online lenders, and dealerships, but which is best for you depends on your current situation. Online lenders and credit unions tend to offer the lowest rates, but we still recommend comparing your options before making a decision.
Does refinancing a car loan hurt my credit?
Your credit score may decline slightly after you refinance a car loan, but the effects should be relatively minimal. Your potential lender will look at your credit history using a hard credit check, which may negatively impact your credit score. For many borrowers, the lower interest rate and monthly payments that result from refinancing make up for any minor dips in their credit scores.
How long after buying a car should you refinance?
To get a lower interest rate, you’ll typically need to wait at least a few months before you refinance a car loan. However, it’s better to seek out low rates earlier in your loan term rather than closer to your payoff date.
How We Rate Loan Providers
Our review process aims to deliver consistent and unbiased assessments of auto loan providers. While there are multiple qualities that make a loan company successful, our review team focuses on those we believe are the most important for consumers:
- Rates: Auto loan companies with high loan amounts and low APRs are more likely to meet customer needs.
- Reputation: Our review team explored ratings from experts and each lender’s number of years in business when giving this score.
- Availability: Companies that cover a variety of circumstances scored best in this category.
- Customer Experience: This rating is based on transparency and consumer satisfaction ratings. We also took into account the helpfulness of each loan provider’s team based on our shopper analysis.
*Data accurate at time of publication.
