Car Loan Refinancing Explained

Car loan refinancing is the process of acquiring a new loan, hopefully with better terms, to pay off your existing loan. If done correctly, refinancing can save you hundreds of dollars over the life of the loan.

Refinancing can be a great financial decision, but is not one to approach without proper knowledge. Use this page to help guide you in your car loan refinance journey.

Why Refinance Your Car With LendingTree?

As with any type of loan, you should want to get the best deal possible. By using LendingTree to refinance your car loan, you’ll receive multiple offers from our top-rated lenders, allowing you to take control and select the best deal for you. Start comparing lenders now and find the best opportunity to refinance your car loan.

Calculate Your Car Refinance  

When to Refinance Your Car Loan

Refinancing your car loan can allow you to decrease your interest rate or reduce your payments, saving money on your loan. It can also allow you more flexible loan terms.

There are times when refinancing can be especially beneficial. For example, if your credit score has improved or interest rates have gone down, you could potentially lower the amount of overall interest you pay on your loan. It can also be beneficial if you are simply searching for better terms. If you have a higher income and want to pay off your loan faster or are looking to budget your money more tightly, a refinance can get you better terms that align with your new financial goals.

While refinancing your car has some great advantages, there are situations when it may not be the right decision. If you extend your car loan term without a lower interest rate, you will pay more in interest over the loan's life. Also, if you are upside on your car loan or have not had your loan for a significant amount of time, refinancing may not be an available option.

It is important to fully understand the benefits and drawbacks of refinancing before you start the process. And if you decide to refinance, always remember to shop around for your loan to ensure you are getting the best deal possible.

Car Refinancing Checklist

To apply for a car refinance with LendingTree, you will need some information about you and your car. Having this information on hand before you start the application will make it more efficient.

  • VIN (Vehicle Identification Number)
  • Mileage
  • Current Interest Rate
  • Current Lender
  • Current Payoff Amount
  • Current Monthly Payment
  • Remaining Payments
  • Your Pre-tax Yearly Income
  • Liquid Assets
  • SSN (Social Security Number)

​Car 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 Car Loan

Car Refinance Calculator

  • %
  • %

Loan comparison:

Current Monthly Payment:
New Monthly Payment:

Basic analysis result:

  • Refinancing your monthly payment

New Monthly Payment:

Compare Car Refinance Offers

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

What does it mean to refinance your car?

What does it mean to refinance your car?

Refinancing your car is the acquiring of a new loan in order to pay off your old one, with the goal of gaining better terms, such as a lower interest rate, on the new loan. When you refinance your car, you transfer the car's title from the original lender to the new one and begin to make payments to the new lender.

When can I refinance my car loan?

When can I refinance my car loan?

You can refinance your car loan virtually as soon as you would like. Because the majority of the interest is paid in the beginning of the loan, the earlier you refinance, the more productive it can be. However, if your car is too old, you may not be able to refinance. If you are able to refinance, you should be aware of becoming "upside down" on your loan, which means you owe more than the car is worth.

How does refinancing a car work?

How does refinancing a car work?

When refinancing a car, you use a new loan, hopefully one with better terms and often with a different lender, to pay off your old loan. You then begin to pay your new lender for the new loan.

How much will I save by refinancing my car loan?

How much will I save by refinancing my car loan?

How much you will save can vary based on factors such as the difference between interest rates, the loan term, and the balance of your current loan. If done correctly, refinancing can save hundreds. You can use our auto refinance calculators to help figure out whether refinancing will save you money.