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Hear from our editors: The 9 best auto refinance loans of 2020

Updated July 28, 2020

This date indicates our editors’ last comprehensive review and may not reflect recent changes in individual terms.
Editorial Note: Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our marketing partners don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when posted. Availability of products, features and discounts may vary by state or territory. Read our Editorial Guidelines to learn more about our team.
Written by: Jennifer Brozic
Refinancing your auto loan involves taking out a new loan to pay off the balance of your existing car loan. An auto refinance could help you snag a lower interest rate, reduce your monthly payment or get access to some much-needed cash.
We’ve analyzed some of the best auto refinance loans for a range of credit profiles — with features such as competitive starting interest rates, a range of loan amounts and the ability to get cash back — to help you find one that could be right for your situation.

Best for people who need help with the refinance process: RateGenius and RefiJet

Why RateGenius and RefiJet stand out: RateGenius and RefiJet streamline the auto-refinancing process by handling the paperwork, title transfer and current loan payoff.
Both lending platforms also make it easy to see and compare estimated loan rates and terms from multiple lenders if you prequalify. But keep in mind that prequalification isn’t a guarantee of approval or loan terms — you won’t receive final loan terms until after you submit a formal loan application.

Here are some more details about RateGenius.

  • Lending platform — RateGenius is an online platform that partners with more than 150 lenders to provide refinance offers to people who qualify for a loan.
  • Eligibility requirements — Your vehicle must be less than 10 years old and have fewer than 120,000 miles. Plus, your existing auto loan must have been open for at least one month, have a balance of $10,000 to $55,000, and have at least 24 months of payments left. Keep in mind that this lender may offer different terms on Credit Karma.
  • Range of credit histories considered — Lenders in the RateGenius network consider applicants with less-than-perfect credit, though interest rates could be significantly higher than someone with good or excellent credit.
Read our full review of RateGenius to learn more.

Here are some more details about RefiJet.

  • National network — RefiJet connects people with a national network of financial institutions, giving you a chance to receive loan offers from multiple lenders.
  • More than just cars — Lenders in the RefiJet network provide refinance loans for cars, motorcycles and other personal-use vehicles.
  • Prequalification eligibility — To apply for prequalification, you must be employed or have a steady source of income. You’ll also need to have a history of on-time auto loan payments, a vehicle that’s no more than 10 years old and full-coverage auto insurance. If you’re eligible to apply for prequalification, you’ll be able to see loan rates and terms that you might qualify for. Just keep in mind that prequalification isn’t a guarantee of loan approval — you’ll still need to submit a formal application once you choose a loan offer to see whether you’re actually approved for any amount.

Best for people with bad credit: New Roads

Why New Roads stands out: Your refinancing options can be limited if you have shaky credit, but New Roads considers applicants with lower credit scores.

Here are some more details about New Roads.

  • Not available in all states — New Roads auto loans are available in 30 states.
  • Less-than-perfect credit considered — New Roads considers applications from people who have a bankruptcy, charge-off or repossession on their credit reports.
  • “Upside-down” loans may be considered — You may qualify for a refinance loan with New Roads, even if you owe more on your current loan than your car is worth. To refinance with New Roads, you generally must have made at least 12 monthly payments on your auto loan, and your current loan balance can’t be more than 120% of your car’s wholesale value.
  • Vehicle eligibility — Your vehicle must be a 2010 or newer model with fewer than 80,000 miles. This mileage requirement is lower than what many other lenders require.
For more details, read our full review of New Roads.

Best for people who qualify for competitive starting interest rates: LightStream and MotoRefi

Why LightStream and MotoRefi stand out: For people with excellent credit who qualify, LightStream and MotoRefi offer low starting interest rates that are close to — or even lower than — the starting rates that some lenders offer on new-car loans.

Here are some more details about LightStream.

  • No age restrictions — There are no restrictions on the age or mileage of the vehicles LightStream will refinance.
  • No prequalification option — Without the ability to prequalify, you’ll be able to see your loan terms only if you submit an application and are approved for a loan. This will involve a hard credit inquiry, which may can lower your credit scores by a few points.
  • Rate Beat program — LightStream promises to beat competitor interest rates by 0.1 of a percentage point if certain conditions are met.

Here are some more details about MotoRefi.

  • Lender network — MotoRefi partners with multiple lenders, so you could receive more than one offer with a single application if you prequalify.
  • Refinancing fee — MotoRefi charges a $399 loan fee to cover costs associated with retitling your car and processing paperwork. This fee is included in your new loan amount.
For more info, check out our full review of MotoRefi.

Best for people who want a cash-out option: Auto Credit Express and RoadLoans

Why Auto Credit Express and RoadLoans stand out: Not all lenders offer cash-out refinancing, but Auto Credit Express and RoadLoans have cash-out options for qualified applicants. But before you apply for this type of loan, consider the risks.
Getting cash back will likely increase the amount you have to repay, which can make it difficult for you to keep up with your payments. And if you default on your loan, the lender may repossess your vehicle. Plus, when you get cash back, your loan-to-value ratio increases, and you might end up owing more than the vehicle is worth, making it difficult to sell or trade in.

Here are some more details about Auto Credit Express.

  • Not a direct lender — Auto Credit Express isn’t a lender. Instead, it connects people with a network of lenders that offer auto financing.
  • Harder to qualify with poor credit — If you have credit scores below 600, you may have difficulty getting approved for an auto refinance loan with Auto Credit Express.
  • Vehicle eligibility — To get a cash-out refinance with Auto Credit Express, you must have equity in your vehicle. Your vehicle must be less than five years old and have no more than 75,000 miles on it. And you must have at least two years left on your current auto loan and owe a minimum of $7,500.

Here are some more details about RoadLoans.

  • Not available in all states — Cash-back refinancing is not available in all states where RoadLoans operates.
  • Bad credit considered — RoadLoans considers people of all credit types, including those who have filed for bankruptcy — as long as the bankruptcy has been discharged.
Read our full review of RoadLoans to learn more.

Best for people with a low car loan balance: AutoPay and U.S. Bank

Why AutoPay and U.S. Bank stand out: Many auto lenders have minimum loan amounts of $5,000 or more, making it difficult to refinance an existing loan with a low balance. But the minimum loan amounts at AutoPay and U.S. Bank are $2,500 and $3,000, respectively.

Here are some more details about AutoPay.

  • Range of loans — Lenders in AutoPay’s network offer traditional, cash back and lease buyout refinancing to qualified applicants.
  • Large loan range — Loans through AutoPay’s lender network range from $2,500 to $100,000 — though a lender may offer different terms on Credit Karma.
  • All credit considered — Lenders in AutoPay’s network consider people across the credit spectrum.
Read our full review of AutoPay to learn more.

Here are some more details about U.S. Bank.

  • Not available in all states — U.S. Bank auto loans are available in 25 states.
  • May need good credit — You may need good credit to qualify for a loan from U.S. Bank. The weighted average FICO® score of people who got auto loans directly from U.S. Bank is 751, according to the bank’s first-quarter 2020 earnings presentation.
  • Refinancing fees — You’ll be charged a minimum fee of $50 and a maximum fee of $100 if you close your account within a year of opening it. If you hope to pay off your refinance loan quickly, you’ll need to consider this added cost.

How we picked these lenders

We selected these lenders based on factors that may be important to people who want to refinance their auto loan, such as…
  • Competitive rates
  • Range of refinance loan types and amounts
  • Whether the lender considers a range of credit profiles
  • Ability to apply for prequalification to see estimated rates and loan terms without affecting credit scores
  • Other perks, like step-by-step guidance throughout the refinancing process

What to consider with auto refinance loans

Whether you should refinance your auto loan depends on a range of factors, including whether your credit health has improved since you took out your current auto loan.
If your current monthly payment doesn’t fit into your budget, watch out for lenders that reduce your car payments by extending your loan term instead of offering a lower rate. With a longer term and the same interest rate, you may have lower monthly payments, but you’ll end up paying more in interest over the life of your loan. Plus, a longer loan term increases the odds that you’ll become upside down on your loan.
As with any loan, be sure to shop around and compare loan offers to find a loan with better terms that fit your financial goals and budget.

FAQ: Editors’ answers

Editorial Note: Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our marketing partners don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when posted. Availability of products, features and discounts may vary by state or territory. Read our Editorial Guidelines to learn more about our team.
When should you refinance your car?
Whether refinancing your car is right for you depends on your financial circumstances and goals. You may want to give it some thought if your finances have improved recently.
Lenders look at a number of factors when determining your loan rate and terms. These may include your credit history, credit scores and debt-to-income ratio — your monthly debt payments compared to your monthly income. If your credit has improved or you’ve reduced your debt since you got your original car loan, you may be able to get a better interest rate with a refinance loan.
Even if your credit was good to begin with, you may not have gotten the best rate possible on your original loan if you didn’t shop around or you got your car from a dealership. Dealers may mark up interest rates in exchange for arranging your financing.
Auto refinancing may also make sense if interest rates have dropped since you took out your current loan. Interest rates can change regularly, and even a drop of 2 or 3 percentage points could result in substantial savings over the life of your loan.
Lastly, a refinance may help if you’re struggling to make your car payment each month. Getting a refinance loan with a longer loan term could help reduce your monthly payments. Just remember that an extended repayment period could mean you end up paying more in total interest on the loan.

When shouldn’t you refinance your car?
You may want to hold off on refinancing your car if you’ve already paid off most of your current auto loan. Interest is often front-loaded, which means that more of your car payment goes toward interest early on and more goes to principal toward the end of the loan term. If you refinance at the end of your loan, you may not be able to save much in interest.
You may have trouble qualifying for a refinance loan if your vehicle is an older model or has a lot of miles on the odometer. Many lenders won’t refinance cars with more than 75,000 to 125,000 miles on them or that are older than five to 10 model years.
Plus, you may want to forego refinancing if the fees outweigh the benefits. Check to see if your current loan has a prepayment penalty. That fee — combined with any refinance fees such as processing, titling and state re-registration fees — can make a refinance more expensive and may cancel out any savings you would have seen with the refinance. Make sure paying these fees would still make sense for you before proceeding with a refinance.

How does auto loan refinancing work?
When you refinance your car loan, you replace your current loan with a new one. The new auto loan will have a new loan term and annual percentage rate. Many banks, credit unions and online lenders offer refinance loans — and the process for getting a refinance loan is similar to getting a loan for a car purchase.
Once you shop around, compare refinance loan offers and determine the best deal for you, you’ll need to complete a loan application. If your loan is approved, you can then pay off your original car loan and transfer your title to your new lender. (Your new lender may do one or both of these things for you.)

Does it cost money to refinance a car?
Refinancing a car may come with some costs. If your current lender charges a prepayment penalty fee for paying off your loan early, you’ll be on the hook for that expense.
Some lenders may also charge fees for services such as processing paperwork or handling title transfers. If your lender doesn’t handle the title transfer, you’ll need to take care of that yourself and pay any associated fees. Title transfer fees vary by state, so check with your state transportation agency to see how much a transfer costs where you live. Depending on the state, you may have to pay re-registration fees for your car. These fees also vary by state.
Some lenders may also charge application or origination fees. Make sure you ask any lenders you’re considering what fees they charge and whether they’re included in your loan amount.