Refinance your car loan and save money

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. 

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Save money on your auto loan

By refinancing, you could receive a new car loan with a lower interest rate and lower monthly payments. If you keep the term the same, you could save money 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.

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 money over the life of your loan.

Rates in your area

Steps to refinance your car 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.

  • 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 your best deal possible.

  • 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 your best rate on your loan.

  • 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.

  • 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!

  • 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
  • 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
  • Payment schedule may difficult for some businesses to meet

Auto Refinance Calculator

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.

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

Frequently asked questions

The process of refinancing your car is similar to the steps you followed when you took out your initial auto loan. Based on your application, a lender potentially offers you an APR, term and monthly payment. If you accept, your new lender typically pays off the original loan, replacing it with a new one. The biggest potential benefits of refinancing your car loan are saving money on interest and/or having a lower monthly payment.

You should refinance your car loan if you need a lower payment or if you can get a better loan offer that would save you money in interest costs. One of the biggest mistakes people make when they consider refinancing is not following through. Check out the best and worst times to refinance your car loan.

Different lenders have different requirements regarding credit score and the documents they may request. You probably won’t need a car appraisal, but you might need other documentation such as:

  • Your lender’s full name, address and phone number
  • Your auto loan account number
  • The amount you originally borrowed
  • Your APR, loan term and interest rate
  • Any fees, such as prepayment penalty fees

Yes, it is possible to be approved for a refinance loan with bad credit  — you could read more about the best bad credit car refinance companies. 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.

If you’d like help recovering from bad credit, you could find a credit counselor in your area.

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.

You probably don’t need a down payment to refinance your car unless you’re underwater on your car loan. A down payment could help you get better loan terms and pay less in interest over the life of the loan.

Every car payment you make at an interest rate that’s higher than what you could qualify for with another lender is a waste of money. But be aware that if you lengthen your loan in order to lower your payments, 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.

The refinance company may try to sell you add-on products like 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.

Keep your eye not only on the monthly payment but also on the total amount of interest (in a dollar amount) that the loan will cost you.

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.

The biggest pro is that you could reduce your monthly payment or pay a lot less in total interest charges, especially if you get a shorter term. The biggest con is that you could pay more in interest if you get a longer term,

If you’re still on the fence, you could use a refinance calculator to see how much money you could save over the life of your loan.

Trading in your car rather than refinancing — might be a possibility. But there are several ways to get out of a car loan, including selling the car and these 11 hacks to pay it off faster. Or, if you’re trying to get out of a car lease, there are several ways to do that, too.