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Best Auto Refinance Loans for July 2024

Kat Tretina

Updated July 01, 2024

Fact checked by

Regine Parrish

PenFed is our top choice if you want to refinance your auto loan. With rates starting at 5.44% for new cars, you can borrow as much as $150,000 for as many as 84 months.

Refinancing replaces your existing loan with another one and can help you get a better rate, especially if you have a high-interest auto loan. You may prequalify for refinancing or you may need to apply directly with a lender. Before you do, it's a good idea to determine the value of your vehicle so you know how much you need.

After researching 21 leading auto loan lenders, we identified the six best auto refinance loans based on their rates, fees, terms, and eligibility requirements (borrower and vehicle).

Best Auto Refinance Loans for July 2024

Best Overall: PenFed
Best Big Bank: PNC Bank
Best Refinance Loan Marketplace: AUTOPAY
Best Credit Union: Consumers Credit Union
Best Online Lender: LightStream
Best for Low Minimum APR: OpenRoad Lending

Depending on when you took out the loan and your credit profile, your car loan may have a high rate. According to Experian, the average rate for new car loans for those with deep subprime credit—meaning a credit score between 300 and 500—was 15.62%.

Best Overall : PenFed

Refinance APR Range: 5.44%-6.79% (new); 6.79%-7.74% (used)
Refinance Loan Amounts: $500–$150,000
Refinance Loan Terms: 36–84 months

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Why We Chose It

PenFed Credit Union is our top auto loan refinance lender for a variety of reasons. Most lenders take at least a day to disburse your loan funds, but PenFed is fast. According to customer support, your auto loan funds can be sent the same day you apply.

PenFed allows a broad range of loan amounts and you can refinance from as little as $500 to as much as $150,000. Its minimum rates are almost as low as they come, giving you a chance to refinance and save a lot of money if you have good credit.

Another perk is that PenFed offers refinancing for up to 125% of the vehicle’s value. You can use this to borrow against your car and get cash for upcoming expenses or to consolidate high-interest debt.

While some credit unions are limited to select groups, the credit union's membership is open to the general public. You can join PenFed by opening a savings account with as little as $5, and PenFed will even provide the funds if you’re approved for an auto loan.

PenFed’s auto loan refinancing program cannot be used to refinance an existing PenFed loan. And if you opt for a longer loan term, such as 84 months, you’ll pay a significantly higher interest rate.

Pros & Cons

Pros

Loans can be funded on the same day you apply
Low loan minimum
Low rates
Finance up to 125% of vehicle’s value
Membership open to the public

Cons

Longer loan terms have different restrictions
Cannot refinance an existing PenFed loan
Must join credit union

Borrower Qualifications

Loans are available in all 50 states, D.C., and select U.S. territories
Does not disclose a minimum credit score
Borrower must join PenFed Credit Union, which requires a $5 deposit into a PenFed savings account (PenFed will provide the $5 if you’re approved)

PenFed does not disclose its income or credit requirements, but it does allow you to pre-qualify for a loan and view your options without affecting your credit score.

Vehicle Qualifications

For loans less than seven years: No limit on vehicle age; must have 125,000 miles or fewer
For loans of seven years or more: Vehicle must be less than five years old and be under 60,000 miles
Maximum loan-to-value ratio: 125%
Allows private-party vehicle purchases: Yes

Best Big Bank : PNC Bank

PNC Bank logo

Refinance APR Range: 6.99%–13.64%
Refinance Loan Amounts: $5,000–$100,000
Refinance Loan Terms: 12–84 months

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Why We Chose It

Many borrowers like the comfort of working with a large bank to take out a loan. When you borrow from a major bank like PNC, you know that the lender is reputable and reliable. If you’re an existing customer, you may be eligible for discounts or other benefits.

Customers can refinance their auto loans and qualify for competitive rates with PNC Bank. And if you sign up for automatic payments with a PNC checking account, you can qualify for a 0.25% interest rate reduction.

PNC also has hardship options for borrowers who experience financial difficulties like unemployment, illness, or other unexpected life events. You may be eligible for a loan modification that makes your payments more affordable, or other solutions.

Pros & Cons

Pros

Co-applicants permitted
Loan amounts up to $100,000
Financial hardship options

Cons

High-mileage cars ineligible for refinancing
Unclear fees and penalties
Good to excellent credit required

Borrower Qualifications

Auto refinance loans are only available in the 29 states where the lender has physical branches.
Lender does not disclose minimum credit score or income requirements.
Borrower must provide two-year employment history and income information.

PNC’s annual report showed that the majority of approved auto loan borrowers had a score of 780 or higher.

Vehicle Qualifications

Maximum accepted vehicle age: 8 years
Maximum accepted mileage: 80,000 miles (borrowers with excellent credit may be able to refinance vehicles with mileages as high as 100,000)
Maximum loan-to-value ratio: 115%
Allows private-party vehicle purchases: Yes

Best Refinance Loan Marketplace : AUTOPAY

Refinance APR Range: As low as 4.67%
Refinance Loan Amounts: $2,500–$100,000
Refinance Loan Terms: 24–96 months

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Why We Chose It

Shopping around for auto loan refinancing can be time-consuming, but AUTOPAY can simplify the process. After you fill out just one form, AUTOPAY connects you with offers from its partner lenders. If you have good credit, you may be offered some very low rates. Lenders have competitive rates and terms as long as 96 months.

AUTOPAY offers flexible loan amounts with minimums as low as $2,500. And AUTOPAY’s partners provide the following refinancing options:

Traditional refinance: The traditional refinance loan may help you lower your interest rate or reduce your monthly payments.
Cash-out refinance: With a cash-out refinance loan, you can borrow more than you owe on your vehicle. Through AUTOPAY’s partners, you can get up to $12,000 cash back to cover other debt or expenses.
Lease buyout: A lease buyout loan allows you to pay off your lease early and keep your vehicle at the end of your base term.

Loan terms, rates, and fees vary by lender, but many of AUTOPAY’s partners charge origination fees.

Pros & Cons

Pros

Accepts a wide range of credit levels
Multiple refinance options
Allows co-applicants

Cons

Does not disclose eligibility requirements
Origination fees may apply

While some lenders offer loan terms as long as 96 months on refinanced auto loans, think twice before opting for such a long term because you’ll pay much more in interest. Use our auto loan calculator to see how your loan term affects your total repayment cost.

Borrower Qualifications

Recommened credit score of 500 or higher
Available in all U.S. states and Washington, D.C.

Vehicle Qualifications

Maximum accepted vehicle age: 10 years
Maximum accepted mileage: 150,000 miles
Maximum loan-to-value ratio: Not disclosed
Allows private-party vehicle purchases: Yes

Best Credit Union : Consumers Credit Union

Refinance APR Range: Starting at 5.99%
Refinance Loan Amounts: $500–$350,000
Refinance Loan Terms: 60–84 months

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Why We Chose It

Credit unions are nonprofit organizations that can be excellent resources for loans. Because they’re nonprofits, they often have lower rates and fees than other lenders.

Members can qualify for a 0.25% rate reduction. Consumers Credit Union will refinance more than just your typical car or truck as it also offers refinancing for motorcycles and recreational vehicles.

Some credit unions have strict membership requirements, but this one doesn’t require membership for auto loans. To join, you can pay $5 to the credit union’s sponsor, the Consumers Cooperative Association, and deposit and maintain a minimum balance of at least $5 in a Consumers Credit Union savings account.

Pros & Cons

Pros

Autopay discounts
Loan options for motorcycles and other vehicles
Membership not required for a loan (according to customer support), but open to the general public

Cons

Unclear borrower requirements
Must provide Social Security number to view rates
Higher rates for older cars

Borrower Qualifications

Consumers Credit Union doesn’t disclose its minimum credit score and income requirements. And to view rates, you must provide your Social Security number.

Vehicle Qualifications

Maximum accepted vehicle age: None
Maximum accepted mileage: None
Maximum loan-to-value ratio: 125%
Allows private-party vehicle purchases: No

Best Online Lender : LightStream

Refinance APR Range: 7.49%–15.44%* with autopay
Refinance Loan Amounts: $5,000–$100,000
Refinance Loan Terms: 2–7 years

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Why We Chose It

LightStream could be a good choice for borrowers who want a quick and easy refinancing option. It's also a good choice for those who own older or high-mileage vehicles. These loans are similar to personal loans, which means they’re unsecured. As such, they have higher rates than you may find elsewhere,

LightStream doesn’t have any limitations for vehicle age, model, or mileage, and the application process won’t be as rigorous. Plus, it boasts rapid loan disbursements. You could receive the loan funds as soon as the same day you apply.

Not everyone qualifies for a loan through LightStream. The lender typically only accepts borrowers with very good to excellent credit, but you can apply with a co-applicant to improve your odds of qualifying for a loan.

Pros & Cons

Pros

Quick loan funding
No appraisals
No restrictions on vehicle age or mileage

Cons

Higher interest rates
Very good to excellent credit required
Cannot refinance LightStream loans

Borrower Qualifications

Must be the age of majority in your state
Must have a verifiable source of income
Available in all 50 states and Washington, D.C.

Vehicle Qualifications

Maximum accepted vehicle age: No maximum
Maximum accepted mileage: No maximum
Maximum loan-to-value ratio: No maximum
Allows private-party vehicle purchases: Yes

Best for Low Minimum APR : OpenRoad Lending

Refinance APR Range: 1.99%–24.99%
Refinance Loan Amounts: $7,500–$100,000
Refinance Loan Terms: 24–72 months

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Why We Chose It

Since its launch in 2009, OpenRoad Lending has grown to provide auto loan and refinancing options.

Through its network of lenders, borrowers with fair credit can qualify for loans, while applicants with the best credit may qualify for extremely low rates. And while some lenders limit refinancing to vehicles with 80,000 miles or less, OpenRoad offers refinancing for vehicles with mileages as high as 160,000 miles.

OpenRoad Lending has some unusual drawbacks. It isn’t available nationwide, and it will not work with self-employed borrowers. And income from Uber or other rideshare companies does not count towards OpenRoad Lending’s income requirements.

Pros & Cons

Pros

Low APRs available
Works with borrowers with fair credit
High maximum mileage

Cons

Will not work with self-employed borrowers
May charge origination fees
Not available in all states

Borrower Qualifications

Minimum credit score of 500
Must be at least 18 years old
Available to residents in 46 U.S. states
Must make at least $2,000 per month (earnings from Uber or similar services do not count toward the income requirement)
Your DTI cannot exceed 40%
Can only refinance auto loans issued by NCUA- or FDIC-insured lenders such as credit unions and banks

Vehicle Qualifications

Maximum accepted vehicle age: Eight years
Maximum accepted mileage: 140,000 miles
Maximum loan-to-value ratio: 175%
Allows private-party vehicle purchases: No
Vehicle restrictions apply, including the exclusion of commercial vehicles, Oldsmobile, Daewoo, Hummers, Saab, Suzuki, and Isuzu models

The Bottom Line

Refinancing an existing auto loan can be a good way to save money or lower your monthly payments. The best auto refinance loans offer competitive interest rates and allow you to customize your loan term to meet your budget.

PenFed is our recommended first stop. Anyone can join this credit union and its rates and terms make it worth the effort. If you want the security of a big bank, PNC allows you to refinance up to $100,000, and you can have as long as seven years to repay the loan. For those who want a cash-out refinance option or a variety of offers, AUTOPAY is a marketplace that lets you view rates from multiple lenders.

When evaluating your options, it’s wise to get quotes from multiple lenders so you can find the lowest auto loan refinance rates based on your creditworthiness. Getting a good auto loan doesn’t have to take long, but it’ll pay to explore your options.

Auto loan refinancing scams are common. Red flags to watch out for include upfront enrollment fees or advising you to stop making payments on your existing loan.

Compare the Best Auto Refinance Loans

Company	Interest Rate	Maximum Loan Amount	Loan Terms
Best Overall: PenFed Credit Union	5.44%-6.79% (new); 6.79%-7.74% (used)	$150,000	36–84 months
Best Big Bank: PNC Bank	6.99%–13.64%	$100,000	12–84 months
Best Refinance Loan Marketplace: AUTOPAY	As low as 4.67%	$100,000	24–96 months
Best Credit Union: Consumers Credit Union	Starting at 5.99%	$350,000	60–84 months
Best Online Lender: LightStream	7.49%–15.44%* with autopay	$100,000	2–7 years
Best for Low Minimum APR: OpenRoad Lending	1.99%–24.99%	$100,000	24–72 months

Guide to Choosing the Best Auto Refinance Loan

What Is an Auto Refinance Loan?

When you refinance your auto loan, you replace your original loan with a new one. This may be with the same lender or another one. Most people refinance their auto loans to get better terms, including a better repayment period and/or a better interest rate. The purpose of an auto refinance loan is to lower the amount of money you pay each month.

Like other loans and credit products, you are subject to a credit check. Lenders are often able to decide whether to approve the loan fairly quickly, especially since the vehicle is used as collateral. The new lender pays off the original loan once the loan is approved and the vehicle's title is transferred to them. Payments are then made to the new loan issuer until you either pay off the loan or refinance it again.

When to Refinance Your Auto Loan

By refinancing your auto loan, you can replace your existing loan with a new one with different terms. Auto loan refinancing can be advantageous in the following scenarios:

Your credit has improved since you took out the original loan: Auto loan rates are largely dependent on the borrower’s credit score. If you had less-than-perfect credit when you took out the loan, you could have an interest rate in the double digits. But if your credit score has improved since then, you could refinance and qualify for a better rate.
You can’t afford your payments: If your payments are too high for your budget, refinancing with a longer-term loan could make your payments more affordable.
Interest rates dropped: Car loan interest rates can fluctuate. If rates have dropped since you took out your loan, you could refinance and qualify for a lower rate, even if your credit hasn’t changed significantly.

Refinancing isn’t for everyone, particularly if you’re in one of the following scenarios:

Your lender charges a prepayment penalty: Prepayment penalties vary by lender and state law. If the lender charges a prepayment penalty, the cost of that penalty may negate the savings you’d get from refinancing.
Rates are similar to what you have: Auto loan refinancing can be a lengthy process, and you may have to pay origination fees or other costs. If the interest rates are similar to what you have now, refinancing may not be an effective way to save money.

If you’ve visited a car dealership lately, you know how expensive new vehicles are right now. With the average price of new cars surpassing $47,000, it’s no surprise that more than 80% of new cars were financed with auto loans.

Factors to Consider for Auto Refinance Loans

When comparing auto refinance lenders, keep the following factors in mind:

Loan terms: In general, auto refinancing loans have terms between two and seven years. The longer the term, the lower the monthly payment, but you’ll likely pay more in interest over time. Lenders usually give the lowest rates to borrowers who opt for shorter loan terms, such as two or three years.
Added fees: Auto refinancing can involve fees like origination fees, prepayment penalties, and registration or documentary stamp fees.
Interest rates: Interest rates are based on your credit, income, car year, make and model, and the selected loan term. Rates vary by lender.
Restrictions: Lenders typically restrict the vehicles that are eligible for refinancing. For example, they may only allow vehicles with less than 100,000 miles or cars that are eight years old or newer.

If you can’t afford your auto loan payments, contact your lender right away. You may be eligible for a loan modification or payment deferral.

Auto Loan Rates by Credit Score

Credit Score	Average APR (New Car)	Average APR (Used Car)
Super Prime: 720+	5.38%	6.80%
Prime: 660-719	6.89%	9.04%
Non-prime: 620-659	9.62%	13.72%
Subprime: 580-619	12.85%	18.97%
Deep Subprime: 579 and below	15.62%	21.57%

Source: Experian: Q1 2024 State of the Automotive Finance Market

Pros and Cons of Auto Loan Refinancing

Pros

Lower monthly payment
Lower interest rates
Repay sooner

Cons

Additional fees
More money in interest
Owe more than vehicle's worth

Pros Explained

You may be able to lower your monthly payment: If you qualify and are approved for a longer term length and/or lower interest rate, you may be able to lower your monthly payment. This can help put more money into your pocket.
You may qualify for a lower interest rate: You may be able to get a lower interest rate if you qualify. It helps if you have good to excellent credit and have the income to deem you a low risk by your lender.
You may be able to pay off your loan earlier: Getting a lower interest rate and lowering your payment may allow you to pay off your loan sooner. If your lender doesn't charge a prepayment penalty and you have the income to support it, you may be able to allocate more money each month to pay down the principal faster.

Cons Explained

You may have to pay additional fees: Applying and getting approved for a loan may come with additional fees. Depending on the lender, you may be charged loan, application, and/or document fees to get through the approval process. Certain lenders also charge origination fees if you're approved, which is often a percentage of the balance.
You may end up paying more money in interest: If you refinance your auto loan for a longer term, you run the risk of paying more money in interest. That's because the bulk of your payments go toward interest rather than the principal balance when you start repaying. That changes as you get closer to the end of your loan.
You may owe more than the vehicle's worth: If you extend your loan to a longer term—say, going from a five-year loan to a seven-year loan—you may owe more money than what your vehicle is worth. This is referred to as going upside-down.

See if you pre-qualify with certain lenders before you apply to refinance your auto loan. With a pre-qualification, you provide a prospective lender with basic information for credit without impacting your credit score. The lender(s) may give you an offer based on a soft credit check. You can complete an application for approval if you accept the offer, at which time the lender will pull a credit check. Once approved, your loan is funded and you can begin repaying the new lender.

How to Refinance Your Auto Loan

Refinancing an auto loan is usually more time-consuming than refinancing an unsecured personal loan or student loan. Because auto loans are secured, there are some extra steps you need to complete.

Shop around: Rates, terms, and fees vary by lender, so shop around and request quotes from multiple companies.
Fill out an application: Once you find a lender, you can complete an application. Many lenders allow you to apply online, but you’ll need to provide the following documents:
Driver’s license
Proof of car insurance
Proof of income
Vehicle registration
Vehicle title, for cash-out refinancing
Payoff letter from existing lender
Vehicle identification number (VIN)
Review terms: The lender will review your application and assign your vehicle a value based on industry data. If the lender approves your application, it will send you a loan agreement that outlines the loan terms and fees.
Sign the agreement: Carefully review the loan agreement, paying particular attention to origination fees and prepayment penalties. If everything looks good to you, sign the agreement and return it to the lender. The lender will pay off your existing loan for you and will instruct you on how to pay the new loan.

Alternatives to Auto Loan Refinancing

As we mentioned above, refinancing an auto loan may not be the right choice for everyone. If you find yourself in one of the scenarios we highlighted earlier or you don't want to go through the refinancing process, you may want to consider some of the alternatives.

Ask your lender to modify your loan: You'll need to contact your lender and explain that you're having trouble keeping up with your payments. Ask whether your lender can either extend your loan term or drop your interest rate to help you out. You may have to put your request in writing. Don't be disheartened if your first request is denied. Keep trying and ask to speak to another department or someone in a higher position.
Sell your car and pay off your loan: Consider selling your vehicle, especially if you can't afford to keep it. If you sell your vehicle to a private buyer, you may be able to get a little extra money. Use the proceeds to pay off your loan. If you have any money left, you may put it toward a more affordable option, including a used car.
Consider a trade-in: Most people opt for this route because it tends to be easier. You can knock off a lot of money from the purchase price of a new vehicle if you trade in your current vehicle. Remember that your loan amount will drop based on the difference between the trade-in value and your loan, which can lower the monthly on your new loan.

Why You Should Trust Us

Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of auto loan lenders. To rate providers, we collected hundreds of data points across more than 20 auto loan lenders, including interest rates, fees, loan amounts, borrower requirements, and vehicle requirements, to ensure that our reviews help users make informed decisions for their borrowing needs. We also conducted a survey of 1,016 auto loan borrowers for attitudes and opinions about lenders and the loan process.

We used this data to review each company for fees, repayment terms, income requirements, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999 and has helped millions of readers around the world become educated on personal finance.

Frequently Asked Questions

When Can You Refinance Your Car Loan?

Although you can refinance immediately after buying your vehicle if you’d like, it may not make sense to refinance so soon. Every time you apply for a loan, your credit score will dip, and taking out a new loan can cause your score to decrease. Instead, it may be a better idea to wait a few months to improve your credit and establish a positive payment history before exploring your refinancing options.
Does Refinancing Your Car Loan Hurt Your Credit Score?
Refinancing a car loan can affect your credit score in the following ways:
- New credit inquiry: As you shop for a loan and lenders review your credit, each hard credit inquiry that occurs can cause your score to decrease by several points.
- New account: If you refinance your loan, the new loan may cause your score to drop. That’s because new credit accounts for 10% of your FICO credit score.
However, the impact to your credit is temporary. Over time, you can improve your score by making the payments on your new loan on time every month. And the money you save by refinancing at a lower rate is typically worth the minor credit damage.
How Many Times Can You Refinance Your Auto Loan?

There isn’t a limit on how many times you can refinance an auto loan. However, refinancing may involve origination fees and transfer fees, so it may not be a financially wise decision. And it also can be a time-consuming process; refinancing can take about two weeks to complete in some cases.
How Long Should I Wait to Refinance My Auto Loan?

That depends on your personal situation. But it's usually a good idea to wait for at least a year before you try to improve your repayment options with an auto refinance. Consider your financial situation and how much you have left on the loan before you refinance your car loan.
Can You Refinance If You Owe More Than What the Car Is Worth?

Generally, lenders determine how much you can borrow based on your car’s current value. If you owe more on your existing loan than your car is worth, you may find that fewer lenders are willing to work with you. Because you’re upside-down on the loan, there is more risk to the lender; if you default on the loan, the lender would get a smaller amount back by selling the car and incur a loss. Some lenders will refinance cars that are worth less than the outstanding loan amount, but they typically charge much higher rates.
What Are the Downsides to Refinancing Your Auto Loan?

One of the biggest disadvantages of refinancing a car loan is that you may end up paying more in interest over the life of the loan even if you secure a lower interest rate. This is especially true if you end up with a longer term for your car loan, such as going from a 36-month term to a 72-month term. You may also end up paying more if you get a variable rates and interest rates go up.
Is There a Minimum Amount that I Can Refinance for an Auto Loan?

Most lenders have a minimum loan amount that they're willing to refinance. These amounts tend to vary, so it's always a good idea to do your research as you look for potential lenders. Keep in mind that most lenders usually refinance larger amounts because they can make more money from these loans.
Companies We Reviewed

We researched and reviewed 21 lenders to find the best seven co-signer and co-borrower loan opportunities you see above on this list. While we write individual reviews for most companies, we do not always write reviews for companies we would not recommend. Below are the companies we researched along with links to individual company reviews to help you learn more before making a decision:
Alliant Credit Union, AUTOPAY, Bank of America, Capital One, CarMax, Carvana, Chase Auto, Consumers Credit Union, Credible, First Tech FCU, LendingClub, LendingTree, LightStream, NASA FCU, Navy Federal, OpenRoad Lending, PenFed, PNC Bank, U.S. Bank, USAA, Vroom.

Guide to Auto Refinancing

Happy young woman dancing with friends in car — Klaus Vedfelt / Getty Images

Article Sources

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