Refinance your car loan

Refinancing could lower your monthly rate and save you hundreds of dollars.

If you’re unsatisfied with your car loan interest rate, duration, or monthly payment, then refinancing your auto loan could help you reduce monthly expenses. Find out your credit score first in order to estimate what interest rate you’ll be eligible to qualify for. You generally need a history of six- to 12-months of on-time payments to make a refinance auto loan worthwhile and possible.

The table shows estimates — not exact amounts — for the savings and monthly payments you might qualify for. 

Lender	APR range*	Min Credit Score
	2.74% to 27%	500 Min credit score	Apply Now On MyAutoLoan’s secure website
	2.84% to 21.99%	600 Min credit score	Apply Now On LendingTree’s secure website
	3.99% to 24.99%	510 Min credit score	Apply Now On LendingClub’s secure website
	2.99% to 21.99%	640 Min credit score	Apply Now On Consumers Credit Union’s secure website
	3.49% to 8.34%	660 Min credit score	Apply Now On Lightstream’s secure website

Best time to refinance your auto loan

There’s not necessarily a right or wrong time to refinance, however, here are a few indicators when you might be able to get a better rate. 

1. Interest rates have dropped

Have market interest rates gone down since you originally bought your car? Whether you bought your car new or used, it could be worth refinancing if interest rates have dropped. For instance, a $15,000 loan at 5% interest (60-month term) will cost you about $1,984 over the course of the loan, with monthly payments of $283. At 2.5%, though, your monthly payments drop to $266 and the loan ends up costing you only $973 over the life of the loan. That’s over $1,000 in savings!

2. Your credit score has improved

Better credit scores translate to lower financing rates. Even a small decrease in your interest rate could result in big savings over the course of your loan term. So if you’ve been making your car payments on time since you first purchased your car for a few months to a year (as well as your other payments), your credit score has likely improved.

3. Your income has changed

Has your income increased or decreased significantly? If you’ve had a few financial setbacks since purchasing your vehicle, you may be able to lower the amount of your monthly payment by refinancing and extending the loan term. On the flip side, if your income has gone up you may want to refinance with a shorter loan term to pay off your debt faster.

4. You’d like to remove your cosigner

You can refinance your loan after time to remove a cosigner. The refinance process essentially gives you a new loan and a new contract, making it easy to add or remove people from the loan.

How to apply for a car refinance loan

There are just a handful of steps to apply for a refinance loan — most of the time it can be done online within two hours. The process generally includes

1. Evaluate your credit — you’ll likely need a score above 500 to qualify.
2. Review lender details and requirements.
3. Get necessary information handy, including proof of employment, proof of residence, and vehicle information.  
4. Apply online directly to lenders to see your actual terms, which vary based on your credit history and other factors.
5. Get at least three different quotes to compare the best deal for you.  
6. Select your auto refinance company and sign your new loan documents.  

Your new lender, the refinance company, will pay off your old loan and you’ll begin making payments to your new lender at the lower rate. While there are many details to take care of, the entire process can be completed in a few hours.