Auto LoansBest Auto Loan Refinance Rates
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How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How to Refinance a Car Loan With Bad Credit

Updated on:
Content was accurate at the time of publication.

Refinancing a car loan can save you money, but it can be hard to do if you have bad credit. The lower your credit score, the less likely you are to find a refinance loan that makes sense financially.

It can be difficult to refinance a car loan with bad credit, but it’s not impossible. Still, you could end up with high interest rates and pricey fees on your new loan.

How bad can your scores be to refinance? Although a FICO score below 580 (or a Vantage score below 600) is considered to be “poor credit,” some refinance lenders might approve you with a score as low as 460.

But on the other hand, you could end up paying sky-high rates with a predatory lender. And the higher the rate, the more likely you are to fall behind on your loan payments.

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Check your credit score


Don’t know your credit score? Sign up at LendingTree Spring to get your free credit score and recommendations to boost your score.

Credit scoreAverage rates for used cars
Deep subprime (300-500)21.55%
Subprime (501-600)18.89%
Near prime (601-660)14.12%
Prime (661-780)9.73%
Super prime (781-850)7.66%

Source: Experian State of the Automotive Finance Market Q4 2023

Check your credit score

There’s a chance you can improve your credit score before you apply for your auto refinance.

Start by pulling your credit reports (for free) from all three of the nationwide credit bureaus — Equifax, Experian and TransUnion — at AnnualCreditReport.com. Check to see if there are errors, like accounts that don’t belong to you, and dispute them if needed.

Just keep in mind that it usually takes time to improve your credit. Any changes to your credit reports can take 30 days or more to affect your credit score. For a big improvement, you may need to spend a few years making on-time debt payments and keeping your credit card balances low.

Learn more about how to improve your credit score.

Talk to your lender

Your best choice may actually be to work with your current lender. Before applying for refinance, see if your lender can help, maybe through a loan modification or a hardship payment plan.

Refinancing with the same company could streamline the process, and discounts may be available. Plus, it will save you the trouble of having to look for a new loan.

Compare bad credit lenders

Besides your current lender, shop around by collecting car loan quotes from three or more other companies.

Be sure to check for any lender fees, as well as your interest rate, monthly payment, time length of repayment and when your first payment would be due.

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Calculate your payments


Use our auto refinance calculator to compare your monthly payments, months to payoff and total interest paid to see if you can save with refinancing.

How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
LenderStarting APRMinimum credit scoreLoan termsLoan amounts
Consumers Credit Union logo6.79%580Up to 84 months$250-$500,000View Personalized Offers
Gravity Lending logo4.99%66048 to 96 months$15,000-$150,000View Personalized Offers
iLending logo5.49%56012 to 96 monthsStarting at $5,000View Personalized Offers
myAutoLoan logo5.74%60024 to 72 monthsStarting at $5,000View Personalized Offers
OpenRoad logo6.49%46036 to 72 months$7,500-$100,000View Personalized Offers

Options are limited when it comes to banks that will refinance a car with bad credit.

Usually, the best place to go for competitive rates on car loans and flexible qualification requirements is a credit union rather than a bank. However, you might find even more options if you expand your search to include online lenders.

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Credit scores aren’t the only detail that matters when it comes to auto refinancing. Even if your credit is bad, there are a few reasons it could still be the right time to refinance your car.

When it may make sense

 Your credit scores have improved: Even if your FICO or Vantage credit score is low, you might qualify for a better loan if those scores are better than when you originally took out your current loan.

 Your car has equity: If your car is worth more than you owe on your loan, you have a better chance of being approved for refinancing. Use free car pricing websites like NADA and Kelley Blue Book (KBB) to get an idea of your car’s current value.

 You qualify for a lower payment: A refinance can reduce your monthly bill by extending your loan payment over a longer term. Although this might raise your interest charges over the life of the loan, it could be worth doing if it’s the only way you can afford to keep up with your payments.

 You can add a cosigner: Having an auto loan cosigner could help you get a better interest rate. Just make sure your cosigner understands that they’re agreeing to be 100% responsible for any loan payments you miss.

When it may not make sense

 Your credit scores have dropped: If your credit scores have fallen since you took on your car loan, you’re unlikely to get a better deal on a refinance.

 High market rates: When interest rates go up, it gets more expensive to borrow money. If auto refinance rates are higher than when you took out your original loan, you’ll have a hard time finding a good refinance option.

 You’re near the end of your loan: Refinancing is less likely to save you money if you only have a year or two of car payments left. In fact, refinancing could end up adding a whole new set of lender fees and higher interest payments (which take place at the beginning of your loan, due to amortization).

You can refinance a car loan with bad credit, even if your credit score is near or below 500. But the lower the score, the harder it is to get approved.

Some lenders do offer auto refinancing for credit scores of 500 or lower. However, the interest rates on these loans are usually very high, and some companies who give bad credit loans are predatory lenders.

Refinancing your car loan can impact your credit scores in a few different ways.

In the short term, your scores may drop because of your new loan applications and the shortened length of your average account history. But in the long run, your credit can improve if you stay current on your loan payments.