Key Takeaways
- Auto Approve is our top choice for auto refinance loans, with a starting APR of 6.24%.
- PenFed Credit Union offers the lowest starting rate at 5.44% for refinancing a lease buyout.
- If your current lender has prepayment penalties, refinancing may not be worth it.
Filters
Loan Term (Months)
12-84
Min. Credit Score
550-680
| Lending Partner | Loan Type | Loan Term (Months) | Min. APR | Min. Credit Score | See More |
|---|---|---|---|---|---|
| Refinance Loan | 48 – 84 | 5.29 | 550 | Compare Rates | |
| Refinance Loan | 12 – 72 | 5.49 | 575 | Compare Rates | |
| Refinance Loan | 36 – 84 | 4.99 | 640 | Compare Rates | |
| Refinance Loan | 12 – 84 | 6.24 | 620 | Compare Rates | |
| Refinance Loan | 36 – 72 | 5.99 | 680 | Compare Rates |
| Lending Partner | Loan Type | Loan Term (Months) | Min. APR | Min. Credit Score | See More |
|---|---|---|---|---|---|
| Refinance Loan | 48 – 84 | 5.29 | 550 | Compare Rates | |
| Refinance Loan | 12 – 72 | 5.49 | 575 | Compare Rates | |
| Refinance Loan | 36 – 84 | 4.99 | 640 | Compare Rates | |
| Refinance Loan | 12 – 84 | 6.24 | 620 | Compare Rates | |
| Refinance Loan | 36 – 72 | 5.99 | 680 | Compare Rates |
No results were found.
If you’re paying a high interest rate on your existing car loan, you don’t have to be stuck with it. Even as little as half a percentage point can save you hundreds, if not thousands, of dollars over the lifetime of your loan. The best auto refinance rates can help you save significantly.
We at the MarketWatch Guides team took an in-depth look at the auto loan industry’s leading lenders to see which offer the best value to borrowers. After comparing interest rates, industry ratings and customer reviews, our team selected these institutions as the top lenders offering the best auto refinance rates.
Top 5 Companies With the Best Auto Refinance Rates
While the best auto refinance rates can save you money, finding the best loan is about more than just the annual percentage rate (APR). In our rankings, our team also takes each lender’s fees, penalties and accessibility into account.
| Lender | Starting Auto Refinance APR | Overall Rating | Industry Standing Rating |
|---|---|---|---|
| 1. Auto Approve | 6.24% | 9.3 | 8.9 |
| 2. myAutoloan | 5.49% | 9.1 | 9.4 |
| 3. PenFed Credit Union | 5.44% | 9.4 | 9.7 |
| 4. Consumers Credit Union | Varies | 9.3 | 10 |
| 5. Gravity Lending | 4.99% | 9.0 | 8.9 |
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*These providers are ranked based on their performance in the refinance auto loan category. However, the overall ratings are based on each lender’s performance across all categories of auto loans, not just refinancing.
*Rates as of 03/12/2024
Best Refinance Loan
Auto Approve
4.5
Starting APR 6.24%
Loan amounts $5,000 to $85,000
Loan terms 12 to 84 months
Availability 50 states
Minimum credit score 600
Auto Approve specializes in refinancing and lease buyouts, so it doesn’t offer financing for new carpurchases. With a starting APR of 6.24%, Auto Approve offers one of the best auto refinance rates.
While Auto Approve doesn’t have the absolutebest ratesoffered byrefinancelenders in this review, it has other benefits. For example, the lender doesn’t chargea loan application feeor a prepayment fee, meaning you can save even more money if you’re able to pay your loan off early. However, Auto Approve does charge a loan origination fee.
You also have some flexibility with Auto Approve since borrowers can choose payment terms ranging from 12 to 84 months. Auto Approve can be a smart choice if you don’t have an ideal credit score, as well. Its minimum is600, which is lower than many lenders’ requirements.
Pros
Assigns a dedicated consultant to find the best loan
High customer review scores
Low rates for customers with good credit scores
Available to borrowers with low credit scores
Simple process
Cons
Only offers auto loan refinancing and lease buyouts, not new auto loans
Some complaints about poor communication
Auto Approve has a strong reputation among industry organizations and with customers. The refinancing lender has anA+ ratingand accreditation from the Better Business Bureau (BBB). It also has high customer review scores, with 4.38out of 5.0 stars from customers on the BBB and4.6 out of 5.0stars on Trustpilot.
Auto Approve reviews are, for the most part, positive. Customers consistently mention professional service and a smooth, simple loan process. The lender does have some negative reviews, though. In unfavorable customer reviews, misunderstandings about payments and fees are common, along with communication frustrations.
Our team reached out to Auto Approve for a comment regarding these negative reviews but did not receive a response.
Read morein our fullAuto Approve review.
Best Low-Rate Option
myAutoloan
4.5
Starting APR 5.49%
Loan amounts $5,000 minimum
Loan terms 24 to 84 months
Availability 48 states (not available in AK or HI)
Minimum credit score 575
When you look for the best refinance auto loan rates, you can shop around with individual lenders or use a loan marketplace to compare several lenders at once. If the latter sounds like a better approach to you, it’s worth considering myAutoloan.
To use myAutoloan’s website, you enter some personal information and wait for refinancing offers to come to you. This approach can yield rates as low as 5.49% APR. The lowest rates are reserved for people with the highest credit scores, but borrowers with lower credit scores can find lenders on the myAutoloan marketplace, too. You can find a refinance auto loan with a credit score as low as 575, which is one of the lowest minimums our team found.
The company also offers a helpful loan calculator that you can use to figure out the monthly payment on a loan based on the APR, the term and the amount borrowed.
Pros
Cons
MyAutoLoan has both anA+ ratingand accreditation from the BBB, reflecting the company’s strong reputation within the industry. Most likely due to the company being a marketplace and not a direct provider of refinance auto loans, myAutoloan doesn’t have many reviews on the BBB. However, it holds a rating of4.0 starsfrom over 920 reviews on Trustpilot.
Among those positive reviews, customers consistently mention how easy it is to get multiple loan offers through the marketplace. When myAutoLoan customers leave unfavorable reviews, they tend to cite the high volume of contacts from lenders they get after using the site as a reason.
Our team reached out to myAutoloan for a comment on its negative reviews but did not receive a response.
Read morein our fullmyAutoloan review.
Most Cohesive Process
PenFed Credit Union
4.7
Starting APR 5.44%
Loan amounts $500 to $150,000
Loan terms 36 to 84 months
Availability 50 states
Minimum credit score 650
The Pentagon Federal Credit Union (or PenFed)typically offers competitive starting APRs. However,you must be a member of PenFed Credit Union to have access to any of its financial products.Formerly available only for active military, veterans, certain government employees and their families, PenFed membership is now open to all. To join, you just have to deposit $5 in a PenFed savings account.
PenFed’s minimum credit score, 610, is higher than what some of the other lenders on this list require. That means the lender’s low rates may not be accessible to many borrowers. The credit union also tends to charge high fees on late or missed payments.
Pros
Low auto loan rates
Discounts through car-buying service
Debt protection available for a fee
Cons
Available only to members
High late payment fee
Requires fair or better credit
PenFed Credit Union has a strong reputation within the industry, as evidenced by itsA+ ratingfrom the BBB. However, that contrasts with the lender’s customer rating on the site, which is nearly 1.19 out of 5.0 stars. But PenFed does well with customers on other sites. It holds an average rating of4.2out of 5.0 starson Trustpilot based on more than 1,480 reviews.
Favorable reviews for PenFed consistently praise the lender’s low rates and easy loan process. But when customers leave negative reviews about PenFed, slow loan processing times are often listed as a reason.
Our team reached out to PenFed Credit Union for a comment regarding its negative reviews but did not receive a response.
Most Flexible Terms
Consumers Credit Union
4.5
Starting APR Varies
Loan amounts $5,000 to $150,000
Loan terms Up to 84 months
Availability 48 states (not in AK or HI)
Minimum credit score 620
With a starting APR of 6.54% for new vehicles and 6.93% for used vehicles, Consumers Credit Union can be a good choice for the best auto refinance rates.
When it comes to loan amounts and term lengths, Consumers Credit Union offers a range of options. You can find loans between $5,000 and $150,000 with terms up to 84 months. This allows borrowers to find auto refinance loans for a variety of vehicles and structure the loans in ways that work for them.
To get a loan from Consumers Credit Union, you also need to be a member. Joining the credit union is a simple process — you’ll need to pay a$5fee to the Consumers Cooperative Association and provide your ID and either your Social Security number or a tax identification number (TIN).
Pros
Up to 100% financing
No maximum or minimum loan amounts
Very flexible lending terms
Cons
Available only to members
Few branches
Must use autopay to get the lowest rates
Despite the fact that Consumers Credit Union is a smaller institution than some of the other lenders in this review, it maintains a strong industry reputation. It holds anA+ ratingand accreditation from the BBB. However, due to its smaller size, there aren’t as many customer reviews online as there are for institutions with larger customer bases.
In the positive reviews available online, members report appreciating being in a member-owned organization instead of being customers of commercial lenders. They also mention a positive borrowing experience. Those who report negative experiences with the credit union tend to point to application delays and technical difficulties.
Our team reached out to Consumers Credit Union for a comment on these reviews but did not receive a response.
Read morein our fullConsumers Credit Union review.
Flexible Loan Terms
Gravity Lending
4.0
Starting APR 4.99%
Loan amounts Varies
Loan terms 36 to 84 months
Availability 50 states
Minimum credit score 640
Gravity Lending offers the lowest refinance rates of our top picks, as low as 4.99% for drivers. However, it does have a higher minimum credit score of 640. As a loan aggregator working with a number of lenders, Gravity Lending’s loan amounts will vary. You can, however, count on it offering flexible loan terms.
Pros
Offers flexible loan terms
Offers a referral bonus
Strong ratings from customers on Trustpilot and the BBB
Cons
No calculator tool or estimated interest rates
Doesn’t disclose max interest rates from lenders
Gravity Lending stands out from the competition with its strong customer review scores and industry reputation. Customers rate the provider a near perfect 5.0 out of 5.0 on both theBBBandTrustpilot.
What Affects Your Auto Refinance Rates?
Lending rates for refinance auto loans are determined by a number of factors about you and your vehicle. Here are some of the main contributors that influence what you’ll pay to refinance your vehicle:
- Credit score: Your credit report is a significant factor in the rates you have access to. Borrowers with excellent credit scores will have access to the best auto refinance rates. A spotty credit history will come with higher interest rates.
- Loan term: Lenders usually charge higher interest rates the longer your loan term is. You’ll typically find the lowest interest rate for the shortest loan term a lender offers.
- Loan-to-value (LTV) ratio: Your LTV ratio is the value of the vehicle compared to how much you still owe on your existing loan. The more you owe on a car compared to its value, the higher your interest rate is likely to be.
- Vehicle age: Not every lender is willing to refinance an older vehicle. Those that do will often charge higher rates.
- Vehicle mileage: Higher-mileage vehicles often come with higher interest rates on refinance loans.
Lenders usually only advertise their most competitive rates. Unless you are in peak financial shape, you’ll probably end up with a higher rate than advertised.
Many lenders offer free quotes over the phone or online. This makes it easier to see which lenders truly offer the best auto refinance rates for you and not just to borrowers in the most ideal financial situation.
However, note that some quotes require a hard credit pull, which can negatively impact your credit. Check whether a quote requires a hard credit inquiry or just a soft credit pull, which doesn’t impact your credit. Getting pre-qualification for loans can also help you get a better idea of where your rates may fall.
What Should You Look for in a Refinance Auto Loan?
Taking all the costs and benefits that come with different loans into account can help you find the best lending solution for you.
Interest Rate
The interest rate on your loan isn’t the only factor in the cost of the loan, but it is the most significant. You’ll find this rate expressed as a percentage. While you sometimes see the terms used interchangeably, interest rate and APR are not the same thing. Your APR is the combination of your interest rate and other loan costs.
Because many auto loans extend over years, even a small difference in your APR can have a profound impact on how much you pay for that loan in interest over its lifetime. Here’s an example:
| Loan Amount | APR | Loan Term | Interest Paid |
|---|---|---|---|
| $25,000 | 1.89% | 72 months | $1,463.95 |
| $25,000 | 2.89% | 72 months | $2,260.13 |
| $25,000 | 3.89% | 72 months | $3,071.20 |
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Loan Term
Depending on your financial situation, you may be able to choose how long your repayment term is. Most lenders offer a range of terms between 12 and 84 months, though some offer shorter and longer terms.
Longer loan terms will have smaller monthly payments. But even at the same rates, you’ll pay more in interest over the lifetime of that loan. In addition, lenders often charge higher interest rates on longer loan terms.
Fees and Penalties
Even with the best auto refinance rates, fees and penalties can quickly add up to make a loan far more expensive than it first appeared. Some lenders charge expensive origination fees that get rolled into the loan, and some charge fees for missing or late payments.
These fees and penalties are often tucked away in the fine print of a loan description. Read everything carefully before signing anything.
Discounts
Some lenders offer discounts that can help reduce your loan cost. Many lenders offer a sizable discount — usually between 0.25% and 0.5% — for enrolling in autopay. You may also be able to get discounts from banks and other larger financial institutions if you sign up for some of their other products, such as savings or investment accounts.
Should You Refinance Your Auto Loan?
Several factors go into determining who can access the best auto refinance rates and how much interest you’ll pay. When it comes to whether auto loan refinancing makes sense for you, there’s even more to consider.
Here are a few examples of when you would — and wouldn’t — want to apply for an auto refinance loan:
When To Consider Refinancing an Auto Loan
A refinance auto loan can be a useful financial tool for people in the following situations:
- Interest rates went down: Interest rates go up and down over time. If you bought a car when interest rates were higher than they are now, it could be a great time to take advantage of the best auto refinance rates.
- Your credit score went up: If you had poor credit in the past or you’ve been making regular on-time car payments for a year or more, your credit score may have improved since you took out the original loan. If that’s the case, you likely have access to better rates now and could save by refinancing.
- You owe less on your car than it’s worth: A low LTV ratio can get you a lower interest rate from a lot of lenders. If you’ve paid off a significant portion of your car’s value and owe less than it’s worth, you might find much better rates with a new lender.
When a Refinance Auto Loan Might Not Make Sense
Refinancing your auto loan doesn’t always put you in a better position, though. Here are some situations in which refinancing may not be a good idea:
- You owe more on the car than it’s worth: Owing more on your car than it’s worth is known as being “upside down” in the financial world. Upside down loans — if they’re available at all — typically come with higher interest rates. While you might get lower monthly payments, you’ll often pay far more over the lifetime of the loan.
- Your current loan has prepayment penalties: To make up for what they’ll lose in interest payments, some lenders charge a fee for paying your loan off early. If your loan comes with prepayment fees, the cost of paying it off early with a new loan could negate any savings you’d get from a lower interest rate.
Deciding whether to refinance your vehicle loan is a big decision. It’s important to take your time and find the right lender and the best auto refinance rates for you. Get quotes from lenders and compare all the aspects of each loan before making a decision.
Best Car Refinance Rates: The Bottom Line
Filters
Loan Term (Months)
12-84
Min. Credit Score
550-680
| Lending Partner | Loan Type | Loan Term (Months) | Min. APR | Min. Credit Score | See More |
|---|---|---|---|---|---|
| Refinance Loan | 48 – 84 | 5.29 | 550 | Compare Rates | |
| Refinance Loan | 12 – 72 | 5.49 | 575 | Compare Rates | |
| Refinance Loan | 36 – 84 | 4.99 | 640 | Compare Rates | |
| Refinance Loan | 12 – 84 | 6.24 | 620 | Compare Rates | |
| Refinance Loan | 36 – 72 | 5.99 | 680 | Compare Rates |
| Lending Partner | Loan Type | Loan Term (Months) | Min. APR | Min. Credit Score | See More |
|---|---|---|---|---|---|
| Refinance Loan | 48 – 84 | 5.29 | 550 | Compare Rates | |
| Refinance Loan | 12 – 72 | 5.49 | 575 | Compare Rates | |
| Refinance Loan | 36 – 84 | 4.99 | 640 | Compare Rates | |
| Refinance Loan | 12 – 84 | 6.24 | 620 | Compare Rates | |
| Refinance Loan | 36 – 72 | 5.99 | 680 | Compare Rates |
No results were found.
All the companies listed above are great places to start searching for the best auto refinance rates. There are many factors that affect your refinance rates and different circ*mstances to consider when deciding when to refinance your auto loan. Shop around and weigh your options so that you can find the best choice for you.
Best Auto Loan Refinance Rates: FAQ
Below are some common questions and answers about the best auto refinance rates:
According to our research, Auto Approve is the best lender to refinance a car. The company offers consistently low rates, is accessible to a wide range of borrowers and doesn’t charge an application fee.
Capital One is our highest recommendation for a bank that offers refinance loans. However, according to our 2023 auto loans consumer survey, Bank of America was the most popular choice for auto loan recipients. While Auto Approve isn’t a bank, we think it’s the best lender for refinancing because of its low APRs and accessibility to borrowers.
Whether refinancing a car is worth it depends on your financial situation. In many cases, the best auto refinance rates can help you save hundreds or even thousands of dollars in interest. But in some cases, such as if your current auto loan has prepayment penalties, refinancing a car may not be worth it.
Any time you take on a new loan, your credit will be negatively impacted. However, since your new debt is a similar amount as your old debt, that impact should be minimal.
In our research, we found auto refinance rates as low as 4.93%. However, lending rates are largely dependent on your financial situation, including your credit score, as well as the term length you choose.
Our Methodology
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best auto loan companies. We collected data on dozens of loan providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the companies that scored the most points topping the list.
Here are the factors our ratings take into account:
- Industry standing: Our research team considered ratings from industry experts and each lender’s years in business when giving this score.
- Rates and discounts: Auto loan providers with low APRs, good discount opportunities and high loan amounts scored highest in this category.
- Availability: Companies that cover a variety of circ*mstances are more likely to meet consumer needs.
- Customer service: This score is based on customer satisfaction ratings and transparency. We also considered the responsiveness, friendliness and helpfulness of each loan company’s customer service team based on our shopper analysis.
Learn more about our methodology and editorial guidelines.
Our credentials:
- 300+ hours researched
- 25 companies reviewed
- 2,000+ consumers surveyed
*Data accurate at time of publication.
If you have feedback or questions about this article, please email the MarketWatch Guides team at editors@marketwatchguides.com.
