Is a 72-month car loan a bad idea?

One problem with longer car loans is the fact that you often wind up “underwater” or "upside down" on your loan. This is because cars tend to depreciate faster than you can pay off your loan. A 72-month car loan means you’re paying off your loan more slowly and have the potential to owe more than your car is worth. However, longer car loans let you secure a more affordable monthly payment, which is likely an important consideration for your budget.

Does refinancing my car hurt my credit?

The process of refinancing can temporarily lower your score. When you apply for a loan and a hard inquiry is submitted, your credit score will drop a few points. Following approval, a new loan account will lower the average age that your credit score holds which can lead to a lower score. But these two factors are a small part of what makes up your credit score and sticking with a monthly payment you cannot afford will likely lead to larger credit issues down the road.

Should I refinance if I’m far along on my original loan's repayment?

It is best to refinance your loan in the early stages of your loan. The interest gradually declines over the lifetime of your loan, so your potential to save money is much higher at the start of your loan. Be mindful that you likely won't be able to refinance within the first six months.

Does refinance start your auto loan over?

Refinancing does start your auto loan over, but it is not a perfectly clean slate. You will sign off on new, more competitive rates in order to save money on your monthly payments. It will make paying off the loan easier, but it is not a reset.

Best auto loan refinance rates for January 2023

Written by

Rebecca Betterton

Edited by

Rhys Subitch

Reviewed by

Mark Kantrowtiz

As of January 30, 2023

The Bankrate promise

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Bankrate’s best refinance auto loans are chosen based on lenders' interest rates, customer experience, available terms and transparency. Lender benefits and drawbacks are fully outlined to help you determine what the best financing option is for you.

Refinancing your auto loan allows you to replace your current loan with a new one in order to get more favorable terms and lower rates. They are available through a variety of lender types, so it is wise to shop around to consider which fits best for your needs.

When it comes to refinance loans, pay special attention to eligibility requirements and available terms. Doing so allows you to know whether your current loan qualifies, and you can adjust your loan to fit your monthly budget.

Once you find the right refinance auto loan for your situation, follow these steps:

1

Review your current loan.

Determine how much you are currently paying in interest, your monthly payment, how much you're set to pay over the life of the loan and what rate you can afford.

2

Check your credit score.

Check to see if your credit has improved since your original loan approval. The higher your credit score, the better your rate will be.

3

Determine the value of your car.

Estimate the worth of your vehicle in order to determine if lenders will be willing to refinance.

4

Shop around.

Available interest rates vary by lender so shop around with at least three different providers. Be sure to compare potential rates with your current loan.

5

Sign off on the new loan.

Gather the necessary documentation and details of the current loan so you can walk away with better rates and terms.
Choosing the best lender comes down to saving you money — either overall or month to month. It’s recommended that you get quotes from at least three lenders before deciding which is right for you. When shopping for an auto loan, compare APRs (annual percentage rates) across multiple lenders. Look for lenders that keep fees to a minimum and offer repayment terms that fit your needs. Pay close attention to the following factors:

1

Approval requirements

Every lender has different requirements to receive approval. Lenders will consider aspects like your credit history, income and debt-to-income ratio.

But refinance loans have their own specifications on vehicle and existing loan requirements. Look out for acceptance criteria based on factors like vehicle age, mileage or time you’ve had the loan.

2

Your current loan

The goal of a refinance auto loan is to walk away with a more affordable monthly payment or lower cost overall. So be sure to compare the specifics of the potential new loan with your current rate. Keep in mind that a longer term is not always the best idea because you can pay more interest.

3

Repayment options

Through refinancing you can extend the life of your loan and lower the monthly payments or pay off the loan quicker and reduce the total cost. Consider which option fits your budget better when determining which lender offers the best terms.


3.9 Bankrate Score	APR from 2.83- 36.00%	Term 24-60mo	Min credit score 700	Apply on partner site	Apply on partner site
3.5 Bankrate Score	APR from 2.49%	Term 48-60mo	Min credit score 700	Apply on partner site	Apply on partner site
3.9 Bankrate Score	APR from 2.14%	Term 60mo	Min credit score 700	Apply on partner site	Apply on partner site
	APR from 5.04- 14.99%	Term 24-84mo	Min credit score 600
4.2 Bankrate Score	APR from 2.99%	Term 36-60mo	Min credit score 700	Apply on partner site	Apply on partner site
	APR from 3.99- 24.99%	Term 60mo	Min credit score 700	Apply on partner site	Apply on partner site
3.8 Bankrate Score	APR from 7.29- 11.54%	Term 36-72mo	Min credit score 700	Apply on partner site	Apply on partner site
3.9 Bankrate Score	APR from 3.12%	Term 48-60mo	Min credit score 700	Apply on partner site	Apply on partner site
4.1 Bankrate Score	APR from 5.61- 29.99%	Term 24-84mo	Min credit score 700	Apply on partner site	Apply on partner site
4.2 Bankrate Score	APR from 6.49- 14.24% with AutoPay	Term 24-84mo	Min credit score 700	Apply on partner site	Apply on partner site
3.2 Bankrate Score	APR from 2.49%	Term 60mo	Min credit score 700	Apply on partner site	Apply on partner site
	Get approved in 2 minutes or less for credit lines up to $200,000. Apply once, even if you aren't ready to purchase for up to 24 months Use Flexline™ to buy new or used vehicles, buyout leases or refinance loans. No impact to credit for pre-approval. One hard credit pull to access line of credit for life* *Lifetime access with rotating balance, lifetime access expires with 24 months of inactivity w/0.25% autopay discount	Apply on partner site	Apply on partner site

Compare auto loan refinance rates in January 2023

Lender	Starting APR	Term
LightStream	6.49%	24 to 84 months
Autopay	2.99%	36 to 60 months
Caribou	2.83%	24 to 60 months
Upstart	5.61%	24 to 84 months
RefiJet	2.49%	48 to 60 months

Loan details presented are current as of January 3, 2023. Check the lenders’ websites for more current information. The auto loan lenders listed here are selected based on factors such as APR, loan amounts, fees, credit requirements and more.

Best auto loan refinance rates of January 2023

Best for fast funding

LightStream

4.2

See offers

Apply on partner site

Min. credit score:: 700
Fixed APR From:: 6.49% –14.24%
Loan amount:: $0– $100,000
Term lengths:: 2 to 7 years
Min. annual income:: Not disclosed

Overview: LightStream offers an easy-to-navigate online interface for unsecured loans. You can apply for repayment terms from 24 to 84 months and a high maximum refinancing amount of $100,000.

Why LightStream is the best for fast funding: If you are in a precarious financial position and need funding right away, LightStream is a great option. With same-day funding available and no additional origination fees, LightStream offers a quick online application process and a higher maximum loan amount than competitors.

Pros
Fast funding

Mobile application available

High loan amount
Cons
Unsecured loans

Must refinance at least $5,000

No prequalification
Who this lender is best for: Someone looking to refinance their vehicle quickly and at a high amount.

Impact on financial wellness: With no prequalification offered, drivers will undergo a hard credit pull upon application submission.

Time to receive funds: As soon as the same day you apply.

Fees: LightStream has no fees.

Additional requirements: Although not disclosed, the best rates will be offered to those with a strong credit history.

Special features: LightStream offers loan terms ranging from 24 to 84 months. The fast-funding timeline coupled with a range of repayment options will give you the freedom to lower your monthly payment.

Best for dedicated customer support

AutoPay

4.2

See offers

Apply on partner site

Min. credit score:: 700
Fixed APR From:: 2.99%
Loan amount:: $2,500– $100,000
Term lengths:: 3 to 5 years
Min. annual income:: Not disclosed

Overview: Autopay presents borrowers with a range of loans directly from its network. The process is completely online and streamlined, empowering drivers to walk away with a new loan as soon as one business day.

Why Autopay is the best for dedicated customer support: Autopay has a team of loan experts who provide real-time support via text message or phone call on questions regarding the application or current loan.

Pros
Large range of acceptance criteria

Cash-back refinancing offered

Ability to compare multiple loans
Cons
Lowest APR only for excellent credit borrowers

Possible down payment

Unspecified credit requirements
Who this lender is best for: Best for someone looking to refinance their vehicle in one sitting with the assistance of a knowledgeable loan expert.

Impact on financial wellness: Following a full loan application after being matched with a lender, borrowers will undergo a hard credit pull.

Time to receive funds: Funding with Autopay can be available as soon as one business day.

Fees: Additional fees vary by each lender.

Additional requirements: Specific requirements are not disclosed. But to refinance, vehicle information on mileage will likely be required.

Special features: Available in all 50 states, Autopay works with a large network of lenders with a high maximum loan amount that allows for borrowers from a range of financial backgrounds to refinance.

Best online experience

Caribou

3.9

See offers

Apply on partner site

Min. credit score:: 750
Fixed APR From:: 2.83% –36.00%
Loan amount:: $0– $100,000
Term lengths:: 2 to 5 years
Min. annual income:: Not disclosed

Overview: Through a number of lender partners, Caribou considers a driver's credit history to match them with a potential lender. The process can be done completely online and simply requires vehicle information.

Why Caribou is the best for shopping online: Caribou’s app and online experience make it very easy to compare different lender rates side by side. Even with its online presence Caribou encourages drivers to speak with its team members who can assist with specific questions seven days a week via phone, email or appointment.

Pros
Customer service available seven days a week

Insurance bundling option

Prequalification offered
Cons
Not available in all states

Processing fees

Undisclosed requirements
Who this lender is best for: Drivers looking to lower their monthly rates and compare potential loans directly online.

Impact on financial wellness: Following your application approval, a hard credit pull will affect your credit score.

Time to receive funds: The funding timeline varies by lender.

Fees: Borrowers can expect a $399 processing fee separate from lender expectations.

Additional requirements: Requirements include personal information about yourself and details about your vehicle.

Special features: Caribou encourages drivers to bundle their new loan with other driving needs such as insurance or extended protection.

Best for people with bad credit

Upstart

4.1

See offers

Apply on partner site

Min. credit score:: 300
Fixed APR From:: 5.61% –29.99%
Loan amount:: $9,000– $60,000
Term lengths:: 2 to 7 years
Min. annual income:: Not disclosed

Overview: Upstart is a less traditional lender option that takes advantage of AI technology to match drivers with potential lenders in minutes.

Why Upstart is the best for people with bad credit: The AI approach also considers a customer's risk in a way that greatly benefits those with less than perfect credit. Upstart’s underwriting criteria factors aspects of a driver's history such as education and salary.

Pros
APR caps out at 17.99 percent

Prequalification available

Flexible acceptance criteria
Cons
No minimum APR stated

Must borrow at least $9,000

No co-borrowers
Who this lender is best for: A person with little to no credit history looking to compare refinance options.

Impact on financial wellness: A hard credit pull will occur following the initial loan application.

Time to receive funds: Funding is available within days of loan approval.

Fees: Fees come only if your vehicle undergoes repossession.

Additional requirements: Your vehicle must be less than 10 years old and have under 140,000 miles.

Special features: Upstart offers a fully translated Spanish website along with bilingual loan officers on staff.

Best for loan comparison

RefiJet

3.5

See offers

Apply on partner site

Min. credit score:: 700
Fixed APR From:: 2.49%
Loan amount:: $0– $1,000,000
Term lengths:: 4 to 5 years
Min. annual income:: Not disclosed

Overview: RefiJet, while not a direct lender, matches borrowers with improved rates and terms for their loan. Funding becomes available as soon as one business day and rates start at 2.49 percent APR.

Why RefiJet is the best for loan comparison: The key to finding the perfect loan comes down to comparison. RefiJet enables you to use its prequalification tool to view and compare available quotes, all without impacting your credit score.

Pros
Direct customer support

Bilingual site availability

Cash-back refinance
Cons
Traditional underwriting criteria

Potential lender fees

Must speak with a representative to prequalify
Who this lender is best for: RefiJet is best for someone who is unsure which loan best fits their needs and wants to explore and compare a number of options before deciding.

Impact on financial wellness: Ability to view rates without hard credit pull, but one following loan approval.

Time to receive funds: Funding will become available as soon as one business day following closing.

Fees: Borrowers can expect fees for loan origination.

Additional requirements: To refinance your vehicle it must be under ten years old and hold less than 150,000 miles.

Special features: RefiJet offers a Spanish version of its website.

How refinancing a car loan works

Refinancing a car loan is essentially just taking out a new car loan — so the steps for applying are mostly the same. You'll need your driver's license, Social Security number and proof of income and insurance, as well as details about your car. If approved, you'll use the funds from your new loan to pay off your old car loan, then begin making monthly payments with your new interest rate and terms.

When you refinance your car loan you receive a new auto loan that replaces your current one. The process is similar to that of getting your initial loan. Following application and approval, you will pay off the initial loan with your new one, then begin making payments on your new loan.

When should you refinance your car loan?

Refinancing your car loan comes down to saving you money. If you are struggling to afford your vehicle payments or think you could receive more favorable terms, it’s a good idea to consider refinancing your current loan. Here are the three main scenarios where refinance is the right choice.

Your credit has improved. Competitive rates are reserved for drivers with very good or excellent credit — scores of 740 and above. So, if your credit score has risen since you signed off on your initial loan agreement, refinancing could save you money on your monthly payments.
You financed through a dealership. Dealer financing likely did not present you with the best available rates and terms. You might be able to get a better deal if you shop elsewhere and refinance your initial vehicle loan.
You can’t afford your monthly payments. If you are struggling to make your monthly vehicle payments and are at the risk of losing your vehicle it is a good idea to refinance your loan. This way you can extend your terms to lower your monthly costs. Keep in mind that you will have to pay more interest over the life of the loan.

What to know before applying for a refinance auto loan

As with any loan, it is best to shop around to different lenders before making your final decision. Each lender has its own methodology when determining your interest rates and terms — so compare to see which best fits your needs.

While every lender measures risk differently, interest rates depend greatly on your credit. Do your homework ahead of time to understand your credit history to get a clear picture of what lenders are looking for and what type of terms you will be offered.

FAQs about refinance

One problem with longer car loans is the fact that you often wind up “underwater” or "upside down" on your loan. This is because cars tend to depreciate faster than you can pay off your loan.

A 72- or 84-month car loan means you’re paying off your loan more slowly and have the potential to owe more than your car is worth. However, longer car loans let you secure a more affordable monthly payment, which is likely an important consideration for your budget.
The process of refinancing can temporarily lower your score. When you apply for a loan and a hard inquiry is submitted, your credit score will drop a few points. Following approval, a new loan account will lower the average age that your credit score holds which can lead to a lower score.

But these two factors are a small part of what makes up your credit score and sticking with a monthly payment you cannot afford will likely lead to larger credit issues down the road.
It is best to refinance your loan in the early stages of your loan. The interest gradually declines over the lifetime of your loan, so your potential to save money is much higher at the start of your loan. Be mindful that you likely won't be able to refinance within the first six months.
Refinancing does start your auto loan over, but it is not a perfectly clean slate. You will sign off on new, more competitive rates in order to save money on your monthly payments. It will make paying off the loan easier, but it is not a reset.

The number of payments on the previous loan also don't carry over to the new one. While the amount is still paid off, you won't have the mark of those payments on the new loan.
Some lenders will expect drivers with poor credit to put money down to provide extra security for the loan. So having cash to refinance can help by lowering the price you’ll have to pay to finance the vehicle. Though a down payment is not always required, equity — the difference in the value of the vehicle and the amount you owe — is.
Refinancing does not automatically mean you are handed a check with more cash, but you may be able to benefit from the equity you have in your car. With cash-out refinancing, you essentially finance for more than you owe so that you get that leftover money in the form of cash — along with an improved auto loan.
To determine if refinancing is worth it for you, you must consider if you will truly save money with new loan terms. For many drivers, it does prove to be worth it if their credit score has improved since they first took out their auto loan, or they originally financed through a dealership. Take advantage of an auto refinance calculator to find out if you will save money with a new loan.
Refinancing your car loan comes with risks that include potentially high interest rates and additional fees. Due to the current state of the market, it is possible you will be met with higher than usual interest rates.

A new loan means extra costs, such as application, transfer and origination fees. And if you extend your loan term, you are more susceptible to becoming upside down on your loan and paying more interest.
You technically can refinance your car loan with poor credit. But unless your score has improved since you initially signed, you will likely not receive improved terms. Instead, consider loan modification or vehicle trade-in.

Methodology

To select the top refinance car loans, Bankrate considers 16 different factors. These factors range in consideration from the loan amount, disclosed APR and acceptance criteria. Each lender holds a score based on four categories.

Availability: This accounts for loan amounts, vehicle restrictions and availability in each state.
Affordability: Primarily, this section covers expected APR, acceptance criteria, discounts for autopay and the number of fees.
Customer experience: This category includes online access, support availability, funding timeline, option for automatic payment and app availability.
Transparency: Here prequalification and disclosure of rates and fees are accounted for.

Why trust Bankrate?

At Bankrate, our mission is to empower you to make smarter financial decisions. We’ve been comparing and surveying financial institutions for more than 40 years to help you find the right products for your situation. Our award-winning editorial team follows strict guidelines to ensure the content is not influenced by advertisers. Additionally, our content is thoroughly reported and vigorously edited to ensure accuracy.

Best auto loan refinance rates for January 2023

How to refinance an auto loan

How to choose the best lender

On this page

Compare auto loan refinance rates in January 2023

Best auto loan refinance rates of January 2023

Best for fast funding

LightStream

Pros & Cons Caret Down

Eligibility & More Caret Down

Best for dedicated customer support

AutoPay

Pros & Cons Caret Down

Eligibility & More Caret Down

Best online experience

Caribou

Pros & Cons Caret Down

Eligibility & More Caret Down

Best for people with bad credit

Upstart

Pros & Cons Caret Down

Eligibility & More Caret Down

Best for loan comparison

RefiJet

Pros & Cons Caret Down

Eligibility & More Caret Down

How refinancing a car loan works

When should you refinance your car loan?

What to know before applying for a refinance auto loan

FAQs about refinance

Is a 72-month car loan a bad idea?

Does refinancing my car hurt my credit?

Should I refinance if I’m far along on my original loan's repayment?

Does refinance start your auto loan over?

Do I need cash to refinance?

Can you get money back when you refinance a car loan?

Is refinancing a car worth it?

What are the disadvantages of refinancing an auto loan?

Can you refinance a car loan with bad credit?

Methodology

Pros & Cons

Eligibility & More

Pros & Cons

Eligibility & More

Pros & Cons

Eligibility & More

Pros & Cons

Eligibility & More

Pros & Cons

Eligibility & More