Best Refinance Auto Loans for 2020

If you purchased a car and financed it for several years, a lot may have changed since you bought it. Your credit may have improved or interest rates went down, which means the lowest auto finance rates are available to you. Or changes in your income or budget mean that you can’t afford your monthly car payment and refinancing an auto loan to save money is vital.

The Simple Dollar SimpleScore is designed to help you find the best places to refinance auto loans. We evaluated features such as interest rates, fees, loan lengths and car restrictions from a variety of auto refinance lenders to help you search for the best places to refinance an auto loan.

Lending Partner
Min. Loan
Fixed APR
Eligible Degrees
  • LightStream
    Min. Loan
    $5,000
    Fixed APR
    2.49% – 9.49% w/AutoPay
    Eligible Degrees
    N/A
    NEXT
    on lender’s secure website
  • PenFed
    Min. Loan
    $500
    Fixed APR
    Starting at 1.39%
    Eligible Degrees
    N/A
    NEXT
    on lender’s secure website
  • Auto Credit Express
    Min. Loan
    N/A
    Fixed APR
    N/A
    Eligible Degrees
    N/A
    NEXT
    on lender’s secure website
  • MyAutoloan
    Min. Loan
    $7,500
    Fixed APR
    3.49%–21.08%
    Eligible Degrees
    N/A
    NEXT
    on lender’s secure website
  • CarsDirect
    Min. Loan
    N/A
    Fixed APR
    3.00% – 12.90%
    Eligible Degrees
    N/A
    NEXT
    on lender’s secure website
  • Auto Credit Express
    Min. Loan
    N/A
    Fixed APR
    N/A
    Eligible Degrees
    N/A
    NEXT
    on lender’s secure website
  • CarsDirect
    Min. Loan
    N/A
    Fixed APR
    3.00% – 12.90%
    Eligible Degrees
    N/A
    NEXT
    on lender’s secure website
  • LightStream
    Min. Loan
    $5,000
    Fixed APR
    2.49% – 9.49% w/AutoPay
    Eligible Degrees
    N/A
    NEXT
    on lender’s secure website
  • MyAutoloan
    Min. Loan
    $7,500
    Fixed APR
    3.49%–21.08%
    Eligible Degrees
    N/A
    NEXT
    on lender’s secure website
  • Penfed
    Min. Loan
    $500
    Fixed APR
    Starting at 1.99%
    Eligible Degrees
    N/A
    NEXT
    on lender’s secure website
  • LightStream
    Min. Loan
    $5,000
    Fixed APR
    2.49% – 9.49% w/AutoPay
    Eligible Degrees
    N/A
    NEXT
    on lender’s secure website
  • LightStream
    Min. Loan
    N/A
    Fixed APR
    2.49% – 9.49% APR w/AutoPay
    Eligible Degrees
    N/A
    NEXT
    on lender’s secure website
  • MyAutoloan
    Min. Loan
    $7,500
    Fixed APR
    3.49%–21.08%
    Eligible Degrees
    N/A
    NEXT
    on lender’s secure website
  • PenFed
    Min. Loan
    N/A
    Fixed APR
    N/A
    Eligible Degrees
    N/A
    NEXT
    on lender’s secure website
In this article

    The best auto refinance loans of 2020

    Auto refinancing loans at a glance

    LenderAPRTermsLoan AmountKey Benefits
    LightStream2.49% – 9.49% APR w/AutoPay24–84 months$5,000–$100,000Low refinance amount
    LendingClub10.68%–35.89%24–84 months$5,000–$55,000Compare two refinance offers
    Capital One4.07%–24.99%24–84 months$7,500–$50,000No credit check for rate
    Bank of AmericaAs low as 3.69%12–75 months$7,500–$100,000Fast decision/rate lock
    US BankAs low as 3.09%24–84 months$10,000–$100,000Online application available
    AutoPayAs low as 1.99%24–84 months$2,500–$100,000Compare multiple refinance offers

    Best overall – LightStream

    Don’t play around with an interest rate check and go in committed — LightStream does a hard pull, which will drop your credit score just a bit.

    APR Range
    2.49% – 9.49% APR w/AutoPay
    Term
    24–84 months
    Customer Satisfaction
    3/5
    SimpleScore
    4.6 / 5.0
    close
    SimpleScore LightStream 4.6
    Rates (Median) 5
    Vehicle Restrictions 5
    Terms 5
    Customer Satisfaction 3
    Fees 5

    Auto refinancing for good credit applicants with no fees, no appraisals, no fuss.Got good credit? Then use it. LightStream will refinance your auto loan at a great rate and no fees if your FICO score is 660 or higher. Borrowers with good credit get plenty of perks from the loan division of SunTrust Bank/Truist. Having good credit means you won’t need to have your car appraised and don’t have to worry about the age or miles of the car. Once you’re approved, you’re on your way to saving money on your monthly payments without all the fuss other borrowers have to deal with.

    LightStream Disclosure

    Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay may be higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.

    Payment example: Monthly payments for a $10,000 loan at 4.99% APR with a term of 3 years would result in 36 monthly payments of $299.66

    © 2020 Truist Financial Corporation. SunTrust, Truist, LightStream, the LightStream logo, and the SunTrust logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.

    Best P2P lender – LendingClub

    LendingClub is the Match.com of auto refinance loans — let the platform introduce you to two new lending candidates to choose from.

    APR Range
    7.00%–24.99%
    Term
    24–84 months
    Customer Satisfaction
    N/A
    SimpleScore
    3.3 / 5.0
    close
    SimpleScore LendingClub 3.3
    Rates (Median) 3
    Vehicle Restrictions 1
    Terms 5
    Customer Satisfaction N/A
    Fees 4

    Skip the bank loan and work with an investor willing to lend you the money you need for an auto refinance loan. Peer-to-peer lending is an alternative way to borrow. Apply for an auto refinance loan and LendingClub will present it to its marketplace of individuals willing to offer loans in exchange for earning some interest on their money. You’ll get back two refinance offers to choose from. The higher your credit score, the lower the risk to the lender — and the lower your interest rate. If you have a lower FICO, you’ll probably qualify for a loan, but don’t expect the best interest rate.

    Best online portal – Capital One

    Try before you buy with no effect to your credit score — get prequalified for an accurate interest rate and monthly payment to decide without obligation.

    APR Range
    4.07%–24.99%
    Term
    36–72 months
    Customer Satisfaction
    4/5
    SimpleScore
    4.6 / 5.0
    close
    SimpleScore Capital One 4.6
    Rates (Median) 4
    Vehicle Restrictions 5
    Terms 5
    Customer Satisfaction 4
    Fees 5

    Prequalify for an auto refinance to know how much the loan will cost you with no effect to your credit. Capital One makes the auto refinance process simple. Enter your information to prequalify for auto refinancing to see what type of loan you can get. You’ll get an accurate picture of interest rate and monthly payments depending on the loan length. The good news is, doing so won’t affect your credit score — the lender won’t do a hard check until you’re officially ready to move forward. You won’t have to worry about any fees when you refinance. Capital One doesn’t charge any and already factored any state title transfer fees into your loan cost when you prequalified.

    Best for existing customers – Bank of America

    Ordering a latte at Starbucks takes longer than getting approved for an auto refinance with Bank of America.

    APR Range
    3.69%–24.99%
    Term
    12–75 months
    Customer Satisfaction
    3/5
    SimpleScore
    3.4 / 5.0
    close
    SimpleScore Bank of America 3.4
    Rates (Median) 4
    Vehicle Restrictions 3
    Terms 3
    Customer Satisfaction 3
    Fees 4

    Take advantage of an existing banking relationship to get a better rate on your auto refinance. Bank of America makes it possible to refinance your car fast — BofA claims you’ll get an answer in just 60 seconds. The bank has plenty of online resources and a car loan calculator to figure out how much your refi will cost you each month. But all the online features don’t hide the fact that you’re working with a traditional lender — qualifying for a refinance may be a challenge if you have a lower credit score. If you already have an account with the bank, your odds may be better and the Preferred Rewards program could earn you a discount on the interest rate.

    Best for short-term refinance – US Bank

    Commitment-phobes will be rewarded with savings on their auto refinance when they opt for a shorter-term loan.

    APR Range
    3.34%–24.99%
    Term
    Up to 36 months
    Customer Satisfaction
    2/5
    SimpleScore
    3.4 / 5.0
    close
    SimpleScore US Bank 3.4
    Rates (Median) 4
    Vehicle Restrictions 5
    Terms 3
    Customer Satisfaction 2
    Fees 3

    Save money on your auto loan refinance when you go with a shorter-term loan from US Bank. Customers that already bank with US Bank and would like the convenience factor of having their loans with their bank would be good candidates for a US Bank auto refinance. Regardless of the reasons for choosing US Bank, the best rates come with shorter refinances. If you can afford a shorter term, you may be able to offset the monthly cost by the interest rate savings.

    Best lender martketplace – Autopay

    Best lender marketplace – AutoPay

    Best for those with FOMO (fear of missing out) — you’ll get several auto refinance offers to choose from.

    APR Range
    1.99%–17.99%
    Term
    Up to 84 months
    Customer Satisfaction
    N/A
    SimpleScore
    4.5 / 5.0
    close
    SimpleScore AutoPay 4.5
    Rates (Median) 5
    Vehicle Restrictions 3
    Terms 5
    Customer Satisfaction N/A
    Fees 5

    Shop your refinance around, even with poor credit, through AutoPay’s lending marketplace. AutoPay makes comparing auto refinance offers a one-stop deal. You’ll get a variety of refi loan offers from banks, credit unions, and other lenders. AutoPay’s impressive 1.99% is saved for people with excellent credit, but the lending marketplace labels itself as credit-score friendly. Even if you have a fair to low credit score, you’ll likely receive offers, albeit at a higher interest rate.

    What is an auto refinancing loan?

    An auto refinancing loan replaces your current car loan with a new one. While there are many reasons why someone may want to refinance their existing automobile loan with a different one, the main reason is to take advantage of a lower interest rate to save money on the monthly auto loan payments. You’re free to refinance — most banks allow you to change lending institutions without prepayment or early cancellation penalties, making a refinance loan a viable idea if a better loan offer comes along.

    [Read: Should You Ever Refinance an Auto Loan?]

    How auto loan refinancing works

    Refinancing a vehicle loan could put cash back in your pocket if you can lower your monthly payments or pay your loan off faster. An auto refinance works similar to a loan, except the new lender pays off the old lender. You’ll need to apply for the loan by showing you have good credit and a solid repayment history. The process, in simple terms works like this:

    • You research to find out if the lender may have restrictions on the type of vehicle, age, and mileage.
    • You apply to prequalify for a loan to know what your new interest rate will be.
    • You play around with the term length to find the ideal monthly payment and loan cost.
    • Once you agree, you formally apply for the loan, providing information on your vehicle and yourself.
    • The lender will perform a credit check and potentially appraise the vehicle.
    • Once you’re approved, your new lender will pay the old lender in full for the loan.
    • You continue your car loan payments to your new lender, hopefully saving money.

    [More: The Simple Dollar Guide to Auto Loans]

    New terms

    Terms in the world of loans and finance stands for the length of your loan. For example, a term of 36 months means a loan length of 36 months. An auto refinance may come with new terms of your choice. If you refinanced to save money, you may keep the same time period as before, but with a lower interest rate to save money on interest. Or you could go with longer terms to stretch out payments for a lower monthly bill. Or you could go with a shorter term than before to pay your loan off faster.

    New rates

    The largest motivating factor for a car refinance is to take advantage of a lower interest rate. If you’ve been paying off an 84-month car loan for the last couple of years, interest rates may have dramatically dropped since then. Or perhaps your credit score is better today after two years of on-time payments. In both scenarios, it may be a good time to refinance your auto loan for a lower interest rate.

    Vehicle restrictions

    When you’re planning on refinancing your auto loan, the lender may have limitations about the type of vehicle they’d be willing to accept a refinance for. The most typical restrictions include age, mileage, car value, and type of vehicle. Most lenders will only refinance a non-commercial vehicle for personal use that’s worth more than the loan. In addition, lenders prefer to provide a loan on a newer car, usually seven to 10 years or newer, and with a limited amount of miles.

    Check Your Auto Loan Rates

    View our top-rated lenders and find the best rates today. It’s quick and easy.

    How to choose the best auto refinancing loan for you

    Choosing the best auto refinance loan for your needs requires a little research and analysis. Let’s break it down into a few steps:

    1. Calculate the current value of your car by using the Kelley Blue Book car valuation tool. Knowing your car’s value is important — some lenders may not refinance a car with a value lower than what’s left on the loan.
    2. Do a review of your credit score by ordering a free annual credit report and looking for any errors that could be affecting your score.
    3. Visit a few lender’s websites for information about refinances, car restrictions and current interest rates.
    4. Apply for a prequalification, ensuring the lender will not do a hard pull on your credit. Hard pulls may affect your credit score. Look for auto refi lenders that only do a soft pull to quote you on your refinance cost.
    5. Decide on whether you’d like to pay the loan off sooner to save money on your interest payments, or you’d like a longer loan, which is not advisable unless you’re really struggling with your car payment.
    6. Compare the offers you’ve rounded up to decide on the best car refinance for your personal needs.
    7. Go back to the lender and formalize the prequalification to refinance your auto loan.

    Auto loan refinancing FAQs

    If interest rates dropped enough where refinancing your auto loan could save you a significant amount of money on your auto loan. It all depends on what you’re comfortable with. If your current monthly payment is $475 per month and refinancing for the same amount of time left comes in at $410 per month, refinancing to save $65 per month is worth it.

    Lenders set restrictions on the type of vehicle they’re willing to finance. Some of the conditions include newer vehicles, ones with higher value, low mileage autos, or cars for personal use only. Lenders are looking out for their investment by ensuring the car you’re refinancing is valuable enough for you to want to continue paying your loan off.

    Refinancing to shorten your loan (if you can realistically afford it) may be in your best interest to get out of debt faster. You’ll not only save on interest from making fewer payments, but you’ll free up a significant amount of money from your monthly spending sooner. Refinancing your loan to lower your payments is advisable if the interest rate is low enough to make your monthly payments lower without changing the time left on your loan. If you’re refinancing to pay less by extending your payments for longer, you should evaluate how else you could make up for the shortfall instead of lengthening the time it takes to pay for your car.

    We welcome your feedback on this article and would love to hear about your experience with the auto refinance loans we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

    Methodology

    SimpleScore

    We’ve created the SimpleScore™ to help you objectively compare products and services here at The Simple Dollar.

    Our editorial team:

    • Identifies five factors to compare across each brand
    • Determines the rating criteria for each factor
    • Calculate an average of those five factor scores to get one SimpleScore™

    We break down each of these five factors and their rating criteria for our review of the best auto loan companies of 2020.

    Why do some brands have different SimpleScores™ on different pages?

    Some brands like Bank of America, Wells Fargo, and Chase have different SimpleScores™ because they offer more than one financial solution — like auto loans, home loans, personal loans and banking.

    For instance, in our Bank of America Mortgage Review, we give the company a 3.8 out 5 based on our five rating factors for mortgages. In our Bank of America Auto Loans Review, we give the company a 4.4 out of 5 based on our rating factors for auto loans. By tailoring our SimpleScore™ to each financial solution, we’re able to give you a more accurate view of their services and how they compare to competitors’ services.

    Minimum new car rate

    Companies that look out for new car buyers with lower rates receive higher scores from us.

    Minimum used car rate

    We also give higher ratings to companies that look out for used car buyers by offering lower rates.

    Maximum loan size

    Having enough money to cover your auto loan is important –– that’s why companies with higher maximum loan amount receive better scores from us.

    Customer satisfaction

    We use the J.D. Power 2019 Consumer Lending Satisfaction Study℠ to find out how customers rate their experience with each company. (If a company is not included in J.D. Power’s study, we skip this rating factor and average the remaining factor scores.)

    Fees

    Fees can add up very fast –– that’s why we give a higher score to companies who have fewer fees.

    Cynthia Paez Bowman

    Contributing Writer

    Cynthia Paez Bowman is a finance, real estate and international business journalist. Her work has been featured in Business Jet Traveler, MSN, CheatSheet.com, Bankrate.com and Freshome.com.

    She owns and operates a small digital marketing and public relations firm that works with select startups and women-owned businesses to provide growth and visibility. Cynthia splits her time between Los Angeles, California, and San Sebastian, Spain. She travels to Africa and the Middle East regularly to consult with women’s NGOs about small business development

    Reviewed by

    • Courtney Mihocik
      Courtney Mihocik

      Courtney Mihocik is an editor at The Simple Dollar who specializes in insurance, personal finance, and loans. Previously, she wrote and edited for Interest.com, PersonalLoans.org, Ballantyne Magazine, Thread Magazine, The Post, ACRN, The New Political, Columbus Alive and the Institute for International Journalism.