What is an Auto Refinance?

An auto refinance is the process of applying for a new auto loan to pay off your existing auto loan, hopefully with a better interest rate and better terms. If your credit score has improved or if interest rates have gone down since you first financed your car, refinancing your auto loan could lower your monthly payment and save you thousands of dollars over the life of your loan.

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Glossary Terms

Auto Refinance
An auto refinance is the process of applying for a new auto loan to pay off your existing auto loan, hopefully with a better interest rate and better... <a href='/glossary/what-is-auto-refinance' title='See the full definition of Auto Refinance'>read more</a>
Cash Back Auto Refinance
Cash back auto refinances could give you cash when you refinance your loan, however, you'll want to make sure you are lowering your interest rate (and... <a href='/glossary/what-is-cash-back-auto-refinance' title='See the full definition of Cash Back Auto Refinance'>read more</a>
Upside Down Car Loan
An upside down car loan is a situation in which you owe more on your car than it's worth. <a href='/glossary/what-is-upside-down-car-loan' title='See the full definition of Upside Down Car Loan'>read more</a>
Vehicle Appraisal
A vehicle appraisal determines how much money your car is currently worth. <a href='/glossary/what-is-vehicle-appraisal' title='See the full definition of Vehicle Appraisal'>read more</a>

Save Money On Your Auto Loan

If you're struggling with your car payments or just hoping to save some money on your auto loan, now could be a great time to refinance your current auto loan.

By refinancing, you'll receive a new car loan with a lower interest rate and lower monthly payments. If you keep the term the same, you could save thousands over the life of the loan. You can also choose to extend your term to get your monthly payments even lower, but keep in mind this could cause you to pay more money in interest over the life of the loan. Estimate your auto refinance with our auto refinance calculator to see if you can save money by refinancing. Whatever you're looking for, let LendingTree help you find opportunities to save on your car loan.

Steps to Refinance Your Auto Loan

Congratulations! You've decided to refinance your auto loan. Here are the steps you need to take to ensure the process will move as smoothly as possible

1stSTEP

Review your current auto loan

Write down your lender, your loan term, your interest rate and your monthly payment. When you start receiving auto refinancing quotes, you can easily compare them to your current auto loan to make sure you are getting the best deal possible.

2ndSTEP

Check your credit score

You can view your credit score for free on LendingTree. If your score doesn't look quite right, you'll want to take care of any discrepancies prior to refinancing. Your credit score will have a direct impact on your interest rate. The better your score, the more likely you are to get the best rate on your loan.

3rdSTEP

View today's auto loan rates

Take a look at current auto loan rates and use our auto refinance calculator to see exactly how much money you could save by refinancing your auto loan.

4thSTEP

Fill out a form and start comparing offers

When you find a lender that meets your needs and is able to offer a competitive rate, contact that lender and get the refinancing process started!

Pros and Cons of an Auto Refinance

It is important to understand the pros and cons of an auto refinance before starting the process. This will help you to better understand if auto refinancing is right for you!

Pros of an Auto Loan Refinance

  • Qualify for a better interest rate

  • Reduce your monthly car payments

  • Save money on the life of your loan

  • Secure more flexible loan terms or payment options

Cons of an Auto Loan Refinance

  • If you extend your term, you could pay more money in interest over the life of the loan

  • If you're upside down on your car loan, you might not qualify

  • If you refinance to a variable interest rate from a fixed interest rate, your rate could rise and your payments will increase

Best Time to Check Auto Refinance Offers

  • Your credit score has improved
  • Interest rates have gone down
  • You got a promotion at work and want to pay your loan off faster
  • You want more wiggle room in your budget and want to reduce your monthly payment
  • It's been two years since you purchased your car
  • You didn't shop around for your loan when you first purchased your car

‚ÄčAuto Refinance Rates

36 Months APR2.24% Interest Rate2.24% Loan Amount$9,500 Monthly Payment$273
48 Months APR2.24% Interest Rate2.24% Loan Amount$12,500 Monthly Payment$272
60 Months APR1.99% Interest Rate1.99% Loan Amount$37,711 Monthly Payment$661

Refinance Your Auto Loan

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Monthly payments are an estimate and are for informational purposes. They do not represent a finance offer. Other tax, license, title, or fees may apply. Disclosures

Frequently Asked Questions

Meaning Of Refinancing An Auto Loan

What does it mean to refinance an auto loan?

To refinance an auto loan means to take out a new car loan to pay off the old one. The main reason someone would want to refinance their auto loan is because they can get a better rate or term than their current loan offers. If your credit score has improved, for example, you may qualify for much better rates now than when you first got your auto loan. This could save you hundreds of dollars over the life of the loan. To see if a refinance would benefit you, comparison shop auto refinance lenders on LendingTree.

The Basics Of Car Refinancing

What is refinancing a car loan?

Refinancing a car loan means taking out a new auto loan to pay off your existing one. If you can get a lower interest rate or better loan terms, a refinance could benefit you. Use LendingTree's auto refinance calculator to see if refinancing your car loan makes sense in your situation. If it does, comparison shop different lenders on LendingTree.

Opportune Times To Refinance Your Car

When should you refinance your car?

If you've made several on-time payments, your credit rating has improved, and/or interest rates have gone down since you purchased your car, it could be a good time for you to refinance your car. While there is no set "rule" on when you should refinance your car, if you think you can get a better rate and save money, it's worth looking into. To get the best rate possible on your auto refinance, make sure to comparison shop different lenders on LendingTree. LendingTree will match you with lenders that can meet your individual car refinancing needs.

Define Car Loan

What is a car loan?

A car loan allows you to purchase a vehicle, new or used, without having to come up with the cash up front. Instead of paying one lump sum, you borrow money from a lender (such as a bank, credit union, online lender or the car dealership's financing department) and pay them back in monthly installments. You are charged interest on your car loan, which is how the lender makes money. To get the best rate on your car loan, comparison shop different lenders on LendingTree.