Refinance your car loan and save money

Compare auto refinance loans today with rates as low as 1.99%.

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How does an auto loan refinance work?

Refinancing replaces your current vehicle loan with a new auto loan, one with a different payment, interest rate or term. You may want to lower your monthly payment or pay off your loan faster.

  • Review your current auto loan

    Gather the following: the name of your lender, loan term, APR, monthly payment, payoff amount and the date you began making payments. Jot it all down so it’s easy to reference when auto refinance lenders ask for it. You could also plug the numbers into the auto refinance calculator, below, to see how much you could save.

  • Check your credit score

    If you have improved your credit since taking out your original auto loan or interest rates have dropped, refinancing could lower your monthly payment and save you money. A lower-than-expected score might mean there are mistakes on your credit report. Double-check that everything is right and take care of any discrepancies before you apply for auto refinancing. You can view your credit score for free on LendingTree.

  • Apply and Compare Offers

    Fill out a single form to receive up to five car loan refinance offers, depending on your creditworthiness. You could also apply directly with your own bank, credit union or online lender. It doesn’t hurt your credit to apply to multiple lenders any more than it does to apply with one, as long as you do so within a 14-day window. The best way to get the lowest refinance rate is to shop around and compare offers, then pick the one that’s best for you.

Is refinancing right for you?

See how much you may save with a refinance car loan. Use our car refinance calculator to compare your best auto refinance offer with your current auto loan to see how much you could save.

When should you refinance your car loan?

  • 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

Auto refinance FAQs

Refinancing your auto loan is worth doing if it can save you money. Every car payment you make at a higher interest rate than you deserve is a waste of money. Even if you stay at the same rate but refinance to a longer term, a lower monthly car payment could help alleviate budget pressure. But be aware that if you do lengthen your loan, you may end up paying a lot more in interest in the long run. Read about the common refinance mistakes that people make so you can avoid them.

Not at all, if it benefits you. The refinance company may try to sell you add-on products like guaranteed auto protection (GAP) insurance or an extended warranty, which can tack on thousands to your car loan. Don’t buy them if you don’t want them.

Applying for any type of auto loan means a credit inquiry. When a lender performs a hard credit pull, your credit score will most likely take a temporary dip. But it’s unlikely to be a severe drop and the impact should be short-lived.

Yes, it is possible to be approved for a refinance loan with bad credit but again, you want to make sure refinancing with a bad-credit refinance company is to your benefit. Like you would with any loan, make sure you apply to a few lenders, not just one, so that you know what you qualify for and get the best deal for you. It may even be possible to refinance after bankruptcy.

You might get a lower APR if:

  • Your credit score improved since you first got your auto loan. Making your auto loan payments on time and in full for six months to a year may further prove your creditworthiness.
  • Interest rates have dropped since you took out your original loan or you received a bad rate with your original loan.
  • Your car is worth more than your loan.

If you haven’t been able to make on-time payments, refinancing may still be a way to lower your monthly bill. An alternative is to ask your current lender to modify your monthly payment.

A cash-out auto refinance is similar to a traditional auto refinance loan with one major twist: The new loan exceeds the total needed to pay off your existing car loan and you pocket the difference. This only works if your car is worth more than the remaining balance, or payoff amount we discussed earlier. It also means you’re taking on more debt and taking a chance that you could wind up underwater on your car loan.

It should cost you less than $100 and possibly nothing. Most auto loans do not have a prepayment penalty or an origination fee. The only thing that may cost is the fee to change the lienholder on the title, depending on your state’s rules, and some of your time. Given that refinancing could potentially save you a lot of money, it’s probably worth it.

Trading in your car and buying another (less expensive) one is an alternative to refinancing, but it’s not your only choice. You could sell your car or simply pay it off faster.