The average new car payment for Americans ranges from $500 to $700 each month. Unfortunately, many people are shelling out more than they should. The good news is that when you look into an auto refinance, you can get a more competitive rate, lower monthly payments, and more peace of mind.
In this post, I’ll cover the best banks and lenders for auto refinances. You’ll learn where to find the best rates for a vehicle loan, along with the most common fees to watch out for.
10 Best Auto Refinance Lenders of April 2024
Here are the ten best auto refinance lenders you can apply with today:
- Autopay
- Bank of America
- Capital One
- Caribou
- Consumers Credit Union
- Digital Federal Credit Union
- LendingClub
- LightStream
- MyAutoloan
- OpenRoad Lending
1. Autopay
Autopay is an online lending marketplace that is entirely focused on car financing. It aims to help customers find the best refinance rates available, ensuring more favorable loan payments and better overall terms.
However, you should keep in mind that Autopay is not a bank or lender itself, but an aggregated market that consolidates the lowest rates for you to choose from for your refinance. The platform will help you with pre-qualification and price-shopping, but does not actually issue your refinance loan.
What We Like
Overall, Autopay is convenient for anyone looking to shop around for the best refinancing terms. You can easily view various loan offers from competing banks and credit unions, all in one browser session.
Autopay also doesn’t require perfect credit, and the platform is available no matter what your credit history looks like. This does not mean that you’ll score a great deal if you have bad credit, but you can at least find out what your options look like.
According to Autopay, its customers save (on average) about $105 per month when they refinance. The platform claims to have issued more than 700,000 auto loans, and its rates start as low as 2.99%.
When you’re ready to apply, you can fill out an application online or over the phone, and the process won’t take more than a few minutes. All you need is some basic details regarding your current loan, plus identifying information like your ID and Social Security number.
Autopay offers both Traditional and Cash Back refinancing, as well as lease buyout options.
Things to Consider
While Autopay’s commitment to providing loans to a variety of credit situations is noteworthy, it doesn’t necessarily mean that it’ll find you the best deal if your credit is struggling. For example, it’s minimum rate of 2.99% sounds great, but that rate will only pop up if you can prove an excellent credit history.
Autopay is much less forthcoming about its maximum APR (Annual Percentage Rate), and without these disclosures, it’s tough to recommend the platform to those who are currently rebuilding their credit.
Additionally, since Autopay is an aggregator and not a bank, it means that you’ll be working with multiple platforms through your refinance process. With this in mind, it’s best to think of Autopay as a great tool to seek out the best rates, but some shoppers might prefer working directly with a bank.
2. Bank of America
Bank of America (BoA) is one of the largest banks in the U.S. and boasts one of the widest-ranging service areas of any financial institution.
If you’re already a BoA banking customer, you probably know that it offers a wide range of lending products, from personal loans to mortgages. It also makes refinancing your car fairly easy, with helpful online tools and dedicated customer service.
What We Like
To start, BoA offers auto loans in all 50 states, so it’s an option no matter where you are. It’s also one of the most well-known banks in the world, so in terms of reliability, you don’t have much to worry about. Of course, bigger isn’t always necessarily better with banks, but there is a certain peace of mind when you work with a household name.
BoA currently offers auto refinancing with rates starting at 6.19% (Note: this rate is accurate for the state of Texas, and each US state will offer slightly different APRs. Check out the website to find yours.) While this might not jump off the page as the best you can do, BoA is fairly upfront with its pricing, so you’ll always know what you’re getting into.
There’s no application fee, and once BoA offers you terms, they are locked in for 30 days while you consider your other options. Plus, when you apply online, you can expect a credit decision to come back in under a minute.
BoA also has a handy refinance calculator on its website, so you can get an idea of your options before you even apply. However, the biggest overall benefit with BoA is its discounts for Preferred Rewards members.
If you have an existing relationship with the bank and have enrolled in the program, you can score up to a .50% discount on your auto refinance APR.
Things to Consider
Big banks rarely offer the most favorable interest rates, whether on a loan or a savings account. With this in mind, it comes down to what type of financial consumer you are.
If you prefer the security and in-person support of a household name, the slightly inflated rate might be well worth it. On the other hand, if you just want to save as much money as possible, it might be worth looking into some online-focused options.
At the end of the day, if you’re a current BoA customer, and especially a Preferred Rewards member, this should be the first place to shop around.
3. Capital One
Capital One might be best known for credit cards, but it’s also one of the biggest banks in the U.S. Operating as an online and traditional hybrid bank, Capital One offers high-earning accounts, and a wide variety of loans and financing.
Though Capital One branches are sparse throughout most parts of the U.S., its online products are available nationwide, including auto refinancing. Even if you aren’t currently a Capital One customer, it’s definitely worth checking out.
What We Like
Like most things Capital One does, the online process for auto refinancing is excellent. Whether you’re looking to save money, pay your car off faster, or get a lower APR, the site is super user-friendly and will direct you toward the perfect solution.
It’s also a quick process to get started, and you can find out if you prequalify in just a few minutes. All you need is your vehicle info, like the model year, dealership, etc. There’s no hard inquiry required to browse, so you can find out your options without hurting your credit score.
Once you enter the basics, Capital One will spit out your rates, along with your minimum and maximum loan amounts. If you see an offer you like, you can complete the application process online.
Things to Consider
Capital One does not advertise its interest rates, so it’ll come down to each individual credit history. It also doesn’t list any credit score requirements, so it’s worth checking out the commitment-free pre-qualifying process to find out if it’s a good fit.
That said, Capital One has made its auto refinancing customer happy so far, with a 4.8-star rating (out of 5) on more than 20,000 online reviews through Bazaarvoice.
Capital One’s minimum loan amount is $7,500 and loans go up to $75,000. How much you qualify for depends on your car and credit, and you should keep in mind that the bank only refinances vehicles that are 10 years old or newer.
4. Caribou
Caribou is a fintech company entirely committed to helping you save money on your car, motorcycle, or whatever else you might drive.
Much like Autopay, Caribou helps you find the best rates on auto loans and insurance from other institutions, rather than issuing them itself. Caribou has offices in Washington, D.C. and Denver, but it offers its auto products throughout the country.
What We Like
Caribou claims that, on average, it saves its customers over $110 per month on car payments. Caribou accomplishes this by focusing on local and community lenders, rather than aggregating offers from the big, nationwide banks. This often results in low rates and greater flexibility, and can make it easier for you to find the best deal.
The platform is entirely online, and you can check your rates without entering your Social Security number or hurting your credit. Caribou breaks down each offer into whether it’ll save you money on monthly payments, term length, or APR.
Things to Consider
With Caribou, the biggest thing to keep in mind is that the company generates revenue by connecting you with lenders, then securing a fee for playing middleman. With this in mind, Caribou charges its lenders $399 for each referral, which it states may be passed along to you to cover by your new lender.
Otherwise, there are no additional fees to consider, and you can check out your rates and browse the options for free.
5. Consumers Credit Union (CCU)
Consumers Credit Union (CCU) is an institution that, unlike many credit unions, allows for anyone, anywhere, to become a member. It doesn’t limit its financial community to a particular area of the country, so its bank accounts, loans, and services are available no matter where you are.
What We Like
CCU offers auto loans with APRs starting as low as 4.94%. Terms are as long as 84 months, and terms in general are highly flexible. Plus, as a member, you qualify for a 0.25% APR discount, which is a nice little perk.
CCU is also great with support from actual people, and you’ll have access to a lending professional throughout the process. The credit union is highly regarded for its customer service, so this is a great option for those who feel like they’ll need some extra support.
Things to Consider
One thing to consider with CCU is that you need to apply for membership before you have access to any of its services. Fortunately, it only costs $5 to join, but it’s still worth consider if you’re interested in its other financial products if you plan to become a member.
CCU also fails to provide minimum and maximum loan amounts for its prospective customers, so you’ll have contact them directly to see how much you qualify for.
6. Digital Federal Credit Union (DCU)
DCU is a Massachusetts-based financial co-op that ranks as one of the 20 largest credit unions in the U.S., and the largest overall in New England. It has over a million members in all 50 states, and offers bank accounts, credit cards, loans, and more.
There are 23 DCU branches throughout Massachusetts and New Hampshire, but DCU also belongs to a nationwide network of shared branches, totaling nearly 6,000 locations.
What We Like
Unlike many lenders, DCU offers refinancing options for both new and used cars. Its main focus is on affordable payments, and it’ll churn out a variety of term lengths so you can choose which plan is best for you.
Plus, DCU is committed to getting you off to a good start with your new loan, so you won’t pay a dime for the first 60 days after you close on it. DCU also takes environmental responsibility into account, so you’ll get a discount if your car meets certain EPA fuel economy standards.
At the moment, DCU APRs start at 5.24%, but the minimum rate is different for each term length. For example, if you refinance for 84 months, the minimum rate goes up to 7.74%
Things to Consider
Membership is required to secure a loan through DCU, so you’ll need to take care of that upfront. To qualify for membership, you need to either be related to a current DCU member, or be associated with one of its partner companies, organizations, or communities. You can find out if you qualify on the DCU website.
7. LendingClub
LendingClub, which fairly recently obtained its very own bank charter, is one of the largest personal lenders around. It also offers consumer and business bank accounts.
The company aims to help consumers work toward their financial goals, and makes it easy to apply for and secure the loan that you need.
What We Like
LendingClub’s online platform is incredibly simple, and you can check out your prequalifying offers in just a few minutes. There are no origination fees or prepayment penalties to worry about, and if your credit is in good shape, you can walk away with a new loan surprisingly quickly.
According to LendingClub, its customers tend to save around $100 per month on average.
Things to Consider
Currently, LendingClub’s refinance rates range from 2.99% to 24.99%. Of course, this is a huge range, which implies that LendingClub is open to working with all different credit scores. However, keeping the higher end of the range in mind, it might not be the best fit if your credit is really struggling.
8. LightStream
LightStream is an online consumer lender, offering loans for everything from cars to debt consolidation.
LightStream’s main value add over competing lenders is its lack of required collateral. This means (assuming your credit history is positive) that you don’t necessarily need to put anything up as collateral to secure your loan.
Its loans are also extremely flexible, and the company is open to helping you out with just about any financial need you have.
What We Like
LightStream loans range from $5,000 to $100,000, so the vast majority of vehicles should qualify for refinancing. There’s no need to get an appraisal to apply, and LightStream doesn’t impose any restrictions on mileage or vehicle age.
You can quickly apply for your auto loan online and, assuming all goes well, you can secure your new loan as soon as the same day you apply. Finding your best rate is simple and painless with LightStreams online process, and rates start as low as 6.49%.
Things to Consider
While LightStream’s process is great for those with excellent credit, the platform does have a fairly high minimum credit score to qualify, so this isn’t the best fit for those rebuilding their credit.
There’s a hard inquiry required to get a hold of your rates, so you also won’t be able to browse your options without your score losing a couple of points.
9. MyAutoloan
MyAutoloan is a direct lending marketplace that finds up to four loan offers per customer. The company has been around since 2003, and it helps consumers narrow down their options for vehicle loans.
MyAutoloan updates its minimum rates daily, so you’ll always know exactly what you’re getting into when you visit the site.
What We Like
We love the streamlined process with MyAutoloan, which breaks it down for its users in a really simple way. To start, you’ll check out the daily interest rates for all types of loans, which separate expected APRs by loan type and amount.
From there, you can get an estimate on your personal rate, without affecting your credit. Then, just plug it into the payment calculator, and you’ll have a pretty good idea of whether or not the loan is going to be worth your while.
If you find an offer you want to jump on, you’ll receive a check from MyAutoloan within 24 hours, which you can use for your refinance.
Things to Consider
While MyAutoloan makes it simple to see your various offers, its cap of four per customer might make some feel like they’re missing out on the entire picture.
MyAutoloan does a solid job overall of meeting its customers’ needs, but it’s important to keep in mind that you might find more variety with other loan aggregators.
10. OpenRoad Lending
OpenRoad Lending is a Dallas-based auto finance company. It aims to provide low-cost, transparent, and flexible loans to its customers, and its performance is backed up by an A+ rating with the Better Business Bureau.
OpenRoad also claims a 98% customer satisfaction rating and states that it saves its customers more than $1,200 per year on average.
What We Like
The OpenRoad application process takes just a few minutes, and the website provides a handy checklist of everything you need to ensure efficiency. There’s no fee to apply for or secure a loan, and you’ll get a decision on your application almost immediately after you fill it out.
Things to Consider
OpenRoad only offers to refinance cars that are 8 years old or newer, and that have under 140,000 miles, so loan-seekers with older vehicles will have to look elsewhere.
OpenRoad also requires a monthly gross income of $1,500 or more, and the payoff amount for your current loan must be between $7,500 and $100,000.
What is Auto Refinancing?
An auto refinance is a new loan that replaces your existing auto loan. Assuming you have decent credit, refinancing provides a window of opportunity to save money.
When you take out an auto refinance loan, you become a borrower with the new loan provider. That institution pays off your current auto loan, and you pay them back over time within your new repayment terms.
At this point, you might be questioning why anyone would offer you better terms. The reality is that auto refinance lenders want your business, just like any other financial company. Much like a credit card balance transfer, lenders are usually eager on your existing debt, assuming that your credit report is in good shape.
Now that you know a little more about auto refinancing, let’s quickly cover when it might be a good time to dive in.
When to Consider an Auto Refinance
The best auto loans allow you to drive the new car you want without breaking your budget. If your current car payment feels too steep, or you just want to save yourself some money over the long term, an auto refinance might be the perfect move to make.
The entire goal of auto loan refinancing is to get yourself a better deal on your car loan, plain and simple. While you can’t lower your total loan amount, you can certainly adjust your loan terms — whether you’re looking for lower monthly payments, a lower interest, rate, or both.
If you completed the loan application process for your current loan when your credit score was struggling, your original loan terms might not reflect your current financial position. For example, if you initially applied with poor credit or good credit, and you’ve since built yourself back up to excellent credit, you’re most likely in line for a more favorable auto loan rate.
The amount of interest you pay on any loan is expressed as an Annual Percentage Rate (APR). Your APR is the amount that you owe on top of your loan balance. The lower your APR is, the less you pay in interest. This is why refinancing in search of a lower APR is always preferable.
Alternatively, if you’re finding that your payment is a stretch every month, you might be able to shrink it by agreeing to a longer-term in your refinance.
Again, there are plenty of reasons why a refinance might make sense. But overall, if you feel like your current deal isn’t the best, it’s worth seeing what’s out there. So, let’s get into it and start shopping around for your new loan.
Frequently Asked Questions
Should I refinance my car through a bank?
It depends. Depending on your situation, a bank might be the best fit, but it might not. Rather than focusing on the type of institution, you should shop around and look at different types, from banks to credit unions to online lenders. That way, you’ll get a good idea of the rates and terms that are available and can make your decision from there.
Does refinancing a car hurt your credit?
When you complete the application process for a refinance, it’s likely that a hard credit inquiry will be required. This will knock your credit score a bit, but not in a hugely significant way. If you stay on time with your payments, you’ll likely see your score bounce back pretty quickly.
Can I refinance my car with the same lender?
Generally, no. If a lender already has your business, it doesn’t benefit them much to give you better terms. Instead, you should look for an outside lender willing to cover your payoff amount, who will be more than happy to give you a better deal to secure your business.
Should You Refinance Your Auto Loan?
Now that you know where to start, your journey toward saving money on your vehicle is ready to begin. Auto refinancing is a great option for many, and it’s always a smart move to explore your options.
As always, do your homework to ensure that you’re saving yourself as much as possible. Every dollar counts. The key is to stay focused on the big picture, which starts with one move in the right direction at a time.
Here’s to saving yourself some cash on your car. And remember: When banks compete, your wallet wins!
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