If you’re having trouble making your auto loan payments or your credit score has recently improved, you may want to refinance your auto loan. Before you do so, make sure that auto loan refinancing is right for you.

Our team has researched the best auto loan providers in the industry. In this guide, we’ll share information about auto loan refinancing as well as bank and lender recommendations. If you want to find auto loan refinancing offers right away, visit AutoApprove.com.


In this article:

What Is Auto Loan Refinancing?

Put simply, auto loan refinancing is when you take out a new auto loan to pay off your existing loan. The reason you might do this is to consolidate your debt with one lender or to secure better loan terms. By refinancing your car loan, you might be able to lower your monthly payment or overall interest. Even if you aren’t able to get a lower interest rate, you may be able to lower your monthly payments if you refinance your auto loan for a longer term.



Is It Worth It To Refinance An Auto Loan?

It can be worth it to refinance your auto loan, but isn’t always a smart move – it depends on your particular situation. Consider auto loan refinancing if any of the following apply:

You have trouble making your monthly payments. If you can’t meet your monthly car payment either because you budgeted poorly when you took out your original loan or your financial situation has changed, you might look into refinancing your auto loan. You can refinance for a longer term to reduce monthly payments.

You want to consolidate your debt. You can sometimes improve your credit score by consolidating your debt with one bank. This would include your auto loan and any other open loans or credit lines.

Federal interest rates drop. When the Federal Reserve lowers interest rates, banks may lower the rates they offer to customers. You can monitor the federal interest rate on the Federal Reserve website.

Your credit score has improved. The main factor that determines your auto loan interest rate is your credit score. If your credit score moves above 500, 600, 660, or 780, you may be eligible for 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 auto loan is a (relatively) bad deal. If you think you were given a bad deal by your current lender, you might try refinancing with another company to secure a better one. The tables below show average auto loan annual percentage rates (APRs) for different credit score ranges. Data comes from a 2020 Experian State of the Auto Finance Market report.

Average Rates 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 Rates 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 exceed those listed for your credit range above, it may be a good idea for you to look into auto loan refinancing. Typically, you need to have made at least six to twelve months of on-time payments before you will be able to refinance your auto loan.



5 Best Auto Loan Refinance Lenders

If you’re ready to seriously consider refinancing, the next step is to find the best refinance auto loan lender. The table below recommends five of the top auto loan refinance companies.

Refinance Auto Loan Provider Lowest APR Offered Refinance Auto Loan Amounts Term Lengths
Auto 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
Consumers Credit Union 2.69% Not specified 60 to 84 months
Auto Credit Express Not specified Not specified Varies



Auto Approve

Auto Approve is a good choice if you have an excellent credit score. Unlike the other providers on this list, Auto Approve is an auto loan broker. This means that the company will match you with a refinance loan administrator to fit your needs. Auto Approve is a good place to start because you can browse offers from several lenders to get an idea of what sort of refinancing you can expect.

The lowest rate offered by Auto Approve is 1.9 percent, which is among the lowest refinancing rates we have seen from any lender. To receive this rate, however, you will need to have an excellent credit score (higher than 780).

Auto Approve is accredited by the Better Business Bureau (BBB), where it has an A+ rating and a near-perfect 4.79 out of 5-star customer review score based on over 500 reviews.

Auto Approve Pros Auto Approve Cons
Low interest rates

Does not offer loans to drivers with very bad credit or

no credit history

Strong customer service reputation  
Easy and fast application process  

To learn more about this lender, read our complete Auto Approve review. You can also start comparing rates by visiting AutoApprove.com.



PenFed Credit Union

A financial institution like PenFed Credit Union is a good place to look for auto loan refinancing. If you are trying to consolidate your debt, PenFed also offers debt consolidation loans, though with a higher interest rate (6.49 percent APR).

If you have a low credit score, you may not be eligible for auto loan refinancing with PenFed Credit Union, as the minimum credit requirements are higher than those of other lenders.

PenFed Credit Union is not accredited by the BBB, but it does have an A+ rating from the BBB.

PenFed Credit Union Pros PenFed Credit Union Cons
Offers exceptionally low interest rates Moderate customer service reputation
A+ rating from the BBB 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 simple application process, and high loan limits.

LightStream is not accredited by the BBB, and it has a B- rating from the organization. However, there have been very few complaints filed against the company in the last three years.

LightStream Pros LightStream Cons
Offered through a bank with an established reputation May not offer loans to those with poor or no credit
High loan amount limits Doesn’t have a shining customer service reputation
No fees  

To learn more about this lender, read our full LightStream review.



Consumers Credit Union

Consumers Credit Union (CCU) was founded in Michigan in 1951. While there are only 20 CCU bank locations in the U.S., anyone can refinance their auto loan by applying online. The bank was named the top Michigan credit union in 2013 by MiBiz as well as the top credit union to work for by Credit Union Journal 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.

Consumers Credit Union Pros Consumers Credit Union Cons
A+ rating and accreditation from the BBB Does not offer short contract terms (60-month minimum)
0.5% rate reduction for CCU members  
Strong industry reputation  



Auto Credit Express

Auto Credit Express is a Michigan-based auto loan broker. This means that it partners with financial institutions to match customers with the best loans based on their needs and credit profile. In addition to new and used car loans, the company matches 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 under 560, the company recommends you raise your credit score before applying for refinancing.

Auto Credit Express is accredited by the BBB, and it has an A+ rating. The customer review score is very low at only 1.68 out of 5 stars based on just over 30 reviews. This number represents a small fraction of the total business that Auto Credit Express conducts. 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 Credit Express Pros Auto Credit Express Cons
A+ rating and accreditation from the BBB Mixed online customer reviews
Offers financing for customers with bad or no credit  
Pairs customers with loans based on credit profile  
Offers special rates for military members  



Final Thoughts On Auto Loan Refinancing

Any of the lenders on our list are a good place to look for auto loan refinancing. But they aren’t the only lenders to consider. Be sure to visit local banks and credit unions to discuss your auto refinancing options. It can be more of a hassle to visit banks in person, but you have the advantage of being able to speak face-to-face with an expert who can walk you through your options.

If you’d prefer to see multiple refinance auto loan offers at once, you can do so by clicking below or visiting AutoCreditExpress.com.