Auto Refinance Companies

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If you’re having trouble making your auto loan payments or your credit score has recently improved, you may want to refinance your auto loan. While refinancing a car loan can save you money it is not for everyone and depends on your current financial situation.

From our research on the best auto loan providers, we have compiled a list of the best auto refinance companies in the industry. In this guide, we’ll also share information about auto loan refinancing so you can determine if it is right for you. If you want to find auto loan refinancing offers right away, visit AutoApprove.com.

If you’re ready to seriously consider refinancing, the first step is to find the best refinance auto loan lender. The table below recommends four of the top auto loan refinance companies with the best rates available. We will also break down each provider’s auto refinance service details, their reputation, pros and cons, and customer reviews.

Best Auto Refinance Rates

*Rates as of 10/7/2022

#1 Auto Approve: Best Place To Refinance A Car

Auto Approve is a good choice if you have an excellent credit score. Unlike the other providers on this list, Auto Approve is an auto loan broker. This means that the company will match you with a refinance loan administrator to fit your needs. Auto Approve is a good place to start because you can browse offers from several lenders to get an idea of what sort of refinancing you can expect.

The lowest rate offered by Auto Approve is 2.94 percent, which is among the lowest refinancing rates we have seen from any lender. To receive this rate, however, you will need to have an excellent credit score (higher than 780).

Auto Approve is accredited by the Better Business Bureau (BBB), where it has an A rating and a near-perfect 4.38 out of 5-star customer review score based on 400 reviews.

To learn more about this lender, read our complete Auto Approve review. You can also start comparing rates by visiting AutoApprove.com.

#2 PenFed Credit Union: Best Credit Union To Refinance A Car

A financial institution like PenFed Credit Union is a good place to look for auto loan refinancing. PenFed offers some of the best rates in the industry. New car refinancing rates (from model year 2020) start at 1.79 percent, while used car refinancing rates start at 2.39 percent.

If you have a low credit score, you may not be eligible for auto loan refinancing with PenFed Credit Union, as the minimum credit requirements are higher than those of other lenders.

PenFed Credit Union is not accredited by the BBB, but it does have an A+ rating from the BBB.

#3 Consumers Credit Union: Best Reputation

Consumers Credit Union (CCU) was founded in Michigan in 1951. While there are only 20 CCU bank locations in the U.S., anyone can refinance their auto loan by applying online. The bank was named the top Michigan credit union in 2013 by MiBiz as well as the top credit union to work for by Credit Union Journal in 2017, 2018, and 2019.

Consumers Credit Union has an A+ rating and accreditation with the BBB. While there are few customer reviews on the BBB website, there are also very few complaints.

#4 Auto Credit Express: Best Auto Refinance For Bad Credit

Auto Credit Express is a Michigan-based auto loan broker. This means that it partners with financial institutions to match customers with the best loans based on their needs and credit profile. In addition to new and used car loans, the company matches borrowers with auto loan refinancing options.

Auto Credit Express specializes in loans for customers with poor credit and bankruptcies. However, if your credit score is under 560, the company recommends you raise your credit score before applying for refinancing.

Auto Credit Express is accredited by the BBB, and it has an A+ rating. The customer review score is very low at only 1 out of 5 stars based on just under 20 reviews. This number represents a small fraction of the total business that Auto Credit Express conducts. On Trustpilot – where Auto Credit Express has a 4.5 out of 5.0-star rating from over 2,800 reviews – customers praise the company’s high level of customer service.

Put simply, auto loan refinancing is when you take out a new auto loan to pay off your existing loan. The reason you might do this is to consolidate your debt with one lender or to secure better loan terms. By using a new loan to refinance your old one, you might be able to lower your monthly payment or overall interest. Even if you aren’t able to get a lower interest rate, you may be able to lower your monthly payments if you refinance your auto loan for a longer term.

When you should refinance your car loan depends on your particular situation. The rule of thumb is to wait at least one year into your current loan before you refinance your auto loan. This gives you enough time to improve your credit score and actually find a better rate. Many lenders also require six to twelve months of on-time payments to qualify for refinancing.

Also, you may owe more than the car is worth in the beginning because of depreciation. Lenders don’t like to refinance auto loans in this situation. You may be required to pay down the balance to match the car’s value before you can refinance the auto loan.

When is Best Time to Refinance a Car Loan?

Below we will give some guidelines on the best time to refinance a car loan. While the timing of refinancing for any of our outlined reasons may depend on your personal situation we recommend making a decision when most of them apply to you.

You Have Trouble Making Monthly Payments

If you can’t meet your monthly car payment either because you budgeted poorly when you took out your original loan or your financial situation has changed, you might look into refinancing your auto loan. You can refinance for a longer term to reduce monthly payments.

You Want To Consolidate Your Debt

You can sometimes improve your credit score by consolidating your debt with one bank. This would include your auto loan and any other open loans or credit lines.

Federal Interest Rates Have Dropped

When the Federal Reserve lowers interest rates, banks may lower the rates they offer to customers. You can monitor the federal interest rate on the Federal Reserve website.

Your Credit Score Has Improved

The main factor that determines your auto loan interest rate is your credit score. If your credit score moves above 500, 600, 660, or 780, you may be eligible for a lower interest rate. You are entitled to a free copy of your credit report at least once a year. Visit AnnualCreditReport.com for more information.

Your Current Auto Loan Doesn’t Have The Best Terms

If you think you were given a bad deal by your current lender, you might try refinancing with another company to secure a better one. You can find lower monthly payments and pay less over the life of the loan if you find a great rate in comparison to your existing auto loan.

When Shouldn’t I Refinance A Car Loan?

Now, when is it too late to refinance an auto loan? Because of the way loans are structured, you pay more of the interest charge at the beginning than the end of the loan. So, at some point, you aren’t saving any money. You should avoid refinancing if you have two years of payments or less to complete.

Auto refinance lenders can also have requirements in this area. They may require that a certain number of months are left, that the balance is above a certain amount, or that the car isn’t above a certain mileage.

Just like when you applied for a purchase loan, your credit score affects the rates you find for refinance auto loans. But if it’s been a year or two since you applied, your credit score may be in a better place. You can take advantage of that and the fact that you’ve already paid toward the value of your car to get a better rate on an auto refinancing loan.

Average Auto Refinance Rates

Auto loan annual percentage rates (APR) range from about one percent to fourteen percent or more. Here’s the average APR per credit score segment according to Experian’s 2022 First Quarter State of the Automotive Finance Market report.

In this section, we will go into detail about how to refinance a car loan if it is right for you. We will break it down into six easy steps so you can understand the process and how to get the best deal when searching for an auto refinancing company. Our steps are as follows:

1. Determine If Auto Refinancing Is Right For You

As discussed in the above section, refinancing an auto loan is not the best option for everyone. Certain situations such as your credit score increasing and federal interest rates decreasing can make refinancing a car a prime opportunity to make lower monthly payments on an auto loan. However, there are a few more questions to ask yourself before you decide whether an auto refinance loan can be a good option:

• Is there a prepayment penalty?
• Is your auto loan balance higher than the value of your car?
• How old is your car?
• What fees are you responsible for?

2. Collect Required Documents

If auto loan refinancing is right for you there are many required documents and information to go forward with the process. Different auto refinance companies require different documents and information, but it is best to be prepared. Documents and information you may need typically includes:

• Personal Information: Such as your Social Security number, previous addresses, and how much you pay in a monthly mortgage or rent payments.
• Proof of Income: Your paycheck stub or employment history.
• Evidence of Car Insurance: Companies may require your auto insurance policy card or other proof of insurance.
• Current Loan Information: A lender may also ask you for your previous loan information or information on your current lender. Take note of your rates and terms so that you can compare when searching for an auto refinance provider.
• Vehicle Information: This may include your car’s VIN (vehicle identification number), make, model, license plate number, or mileage.

3. Evaluate Your Credit Score

Credit score is the main component that affects your auto refinance interest rates and if you have paid off your debts in full over a long period of time, your credit score may have improved. If this is the case, your rates and overall affordability for an auto loan may change drastically making refinancing worth it. You can check your score through your credit report for free on many credit card sites for or through other reputable institutions like Experian and Equifax. From here you can see a detailed look at what affects your credit so you can make a better decision.

4. Find Out What You Can Save

5. Apply and Compare Auto Refinance Offers

Using the information you gather in the above steps, you can start applying and comparing auto refinance loan offers. Make sure to look out for interest rate differences and term length as these will be critical in determining what you will save with each provider. Depending on the offers you receive keeping your original loan term may be beneficial if you get a better rate. You can also extend the term of your loan to lower your monthly payments over time to give you more breathing room.

6. Pick The Best Auto Refinance Company For You

Once you find best auto loan company for your situation, you can complete the process and receive new paperwork to sign to replace your old loan. This new company will then pay off your original loan as you make monthly payments. The process may require a lot of time, but it can be completed in just a few hours.

Any of the car refinance companies on our list are a good place to look for an auto refinance loan, but they aren’t the only lenders to consider. Be sure to visit local banks and credit unions to discuss your auto refinancing options. It can be more of a hassle to visit banks in person, but you have the advantage of being able to speak face-to-face with an expert who can walk you through your options.

If you’d prefer to see multiple refinance auto loan offers at once, you can do so by clicking below or visiting AutoCreditExpress.com.

Best Car Refinance Companies: FAQ

Below are sample frequently asked questions and answers about the best car refinance companies: