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.

Where can I refinance my car loan?

You may be able to refinance your auto loan at a lower rate with your current lender. Consider starting there and then comparing options from online lenders, banks and credit unions.

Best auto loan refinance rates for October 2024

Written by

Rebecca Betterton

Edited by

Rhys Subitch

Updated Sep 26, 2024

What to know first: 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. Bankrate's best refinance auto loans were chosen based on each lender's interest rates, customer experience, available terms and transparency.

Consider the lender benefits and drawbacks outlined below to find the best option for you. Pay special attention to eligibility requirements to make sure your current loan qualifies.

Filter results


REFINANCE	4.0 Bankrate Review	APR from 4.99- 14.99%	Term 36-84mo	Min credit score 640	Apply on partner site	Apply on partner site
REFINANCE	4.2 Bankrate Review	APR from 4.99%	Term 12-84mo	Min credit score 580	Apply on partner site	Apply on partner site
REFINANCE	4.0 Bankrate Review	APR from 5.29- 24.99%	Term 12-84mo	Min credit score 620	Apply on partner site	Apply on partner site
REFINANCE	3.7 Bankrate Review	APR from 5.49%	Term 24-84mo	Min credit score 600	Apply on partner site	Apply on partner site
REFINANCE	4.5 Bankrate Review	APR from 5.48- 28.55%	Term 24-84mo	Min credit score 640	Apply on partner site	Apply on partner site
REFINANCE	3.9 Bankrate Review	APR from 5.29- 21.99%	Term 24-96mo	Min credit score 580	Apply on partner site	Apply on partner site
REFINANCE	4.2 Bankrate Review	APR from 7.49- 15.44% * with AutoPay	Term 24-84mo	Min credit score Not disclosed	Apply on partner site	Apply on partner site
REFINANCE	4.4 Bankrate Review	APR from 5.49- 18.79%	Term 24-84mo	Min credit score 560	Apply on partner site	Apply on partner site
REFINANCE	4.3 Bankrate Review	APR from 4.85- 12.85%	Term 48-72mo	Min credit score 680	Apply on partner site	Apply on partner site

Compare auto loan refinance lenders in October 2024

When comparing auto loans, pay close attention to the available APR (annual percentage rate) and loan term. The APR is the interest rate at which you will repay your loan. The term is the amount of time that you agree to pay it back. These two aspects are especially important for a refinance loan to ensure you avoid the risk of becoming upside-down on your new loan.

Lender	APR	Term
Gravity Lending	4.99%-14.99%	36 to 84 months
LightStream	7.49%-15.44%* with AutoPay	24 to 84 months
Autopay	Starting at 4.99%	12 to 84 months
Auto Approve	5.29%-24.99%	12 to 84 months
myAutoLoan	Starting at 5.47%	24 to 84 months
Caribou	5.48%-28.55%	Not specified
Upstart	7.27%-29.99%	24 to 84 months
RefiJet	5.29%-21.99%	24 to 96 months
LendingClub	4.99%-24.99%	24 to 84 months
iLending	5.49%-18.79%	12 to 84 months

Loan details presented are current as of August 25, 2024. 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.

A closer look at our top auto loan refinancing lenders

Not all refinance auto lenders are created equal. Some boast an online-only experience, while others are geared for in-person support. Many lenders also have specific eligibility requirements around vehicle age or loan amount. Consider the ins and outs of our top auto loan refinance lenders.

LightStream: Best for fast funding

4.2

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.

Read Bankrate's Expert LightStream Review

Fixed APR

7.49%–15.44%

Loan amount

$5k– $100k

Min credit score

Not specified

Someone with an excellent credit score looking to refinance an expensive vehicle quickly may benefit from a LightStream loan.
- Established in 2012
- Available in all 50 states
- Online application
- Zero fees
- Mobile app
- Rate beat program
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: LightStream only approves applicants with good to excellent credit scores.

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.

Autopay: Bankrate award winner for best auto loan online lender

4.2

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 within as little as one business day.

Read Bankrate's Expert Autopay Review

Fixed APR

4.99%

Loan amount

$5k– $150k

Min credit score

580

Those who want to take the legwork out of comparing rates online and who are looking to apply with a co-signer may get the most out of a refinance loan with Autopay.
- Online application
- Cash-back refinancing
- Lending marketplace
- Co-signers encouraged
- Bank-level security
- Over 700,000 customers
Pros

Large range of acceptance criteria

Possible down payment

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: Autopay’s website does not list vehicle requirements, but you’ll likely have to provide details when you apply.

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.

Caribou: Best for fair credit loan comparison

4.5

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.

Read Bankrate's Expert Caribou Review

Fixed APR

5.48%–28.55%

Loan amount

$10,000– $125,000

Min credit score

640

Drivers looking for a fully online experience who have good credit or better and want to comparison shop in one place may benefit from using Caribou.
- Online application
- Comprehensive customer service
- Side-by-side comparison
- Co-borrowers encouraged
- Over 100,000 customers
- Fully online process
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 $499 processing fee separate from lender expectations.
Additional requirements: You will need a credit score of at least 640 and at least $2,000 in monthly income. Your car should be under 120,000 miles.

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

RefiJet: Best for dedicated customer support

3.9

Overview: RefiJet is a lender marketplace that connects borrowers to the right loan for their needs. It boasts a wide range of loan amounts and terms and provides a dedicated specialist to each borrower.

Read Bankrate's Expert RefiJet Review

Fixed APR

5.29%–21.99%

Loan amount

$5k– $150k

Min credit score

580

RefiJet matches borrowers with a financial expert to assist in the application and funding process, so it's best for those who want a hands-on experience. The team will help throughout and handle the paperwork.
- Launched in 2016
- Online application
- Dedicated specialist
- Prequalification
- Payment free period

What is auto refinancing?

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.

Pros and cons of refinancing an auto loan

The choice to refinance your auto loan requires some consideration about the state of your finances and vehicle. Weigh the benefits and drawbacks of refinancing before moving forward with it.

Pros

Potential to decrease monthly cost.
Ability to sign off on more competitive interest rates.
Likelihood of paying off auto loan sooner.
Accessing quick cash.

Cons

Potentially high interest rates.
Additional fees incurred.
Risk of becoming upside-down on 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 main scenarios where refinancing 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 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.
You have positive equity: If you have positive equity in your vehicle, or the value of your vehicle is worth more than you owe, the cash-out refinance process could present you with some extra money and improved loan terms.
You have issues with your current lender: If you are struggling with your lender, refinancing may help avoid future problems. But look out if there are prepayment penalties enforced, which could outweigh your savings.
Interest rates dropped: Even if there hasn’t been a boost in your credit, if interest rates have changed with the prime rate then you may be able to secure improved rates — especially if a lot of time has passed.

When should you not refinance your car loan?

While the potential for a lower monthly payment is promising, it cannot always become a reality. Consider the following times when refinancing is likely not the best financial move.

When you’re close to paying off your loan: Unless you desperately need to reduce your monthly payment, refinancing close to the end of your loan is a risk. Lenders usually have a minimum term requirement, which can make it difficult. And even if you do gain approval, you can be left overextending and paying more.
When you owe more than the car is worth: The further along you are on the loan, the more likely you are to become upside down.
When interest rates are high: Interest rates are at elevated levels right now, so if you have an average interest rate, you might not be able to find anything better in the current environment.
When your car doesn’t meet lender requirements: Lenders have restrictions on your financial background and the age and mileage of your vehicle. If you do not meet these conditions, a refi might not be possible.
When fees will outweigh your savings: Some lenders enforce prepayment penalties, which can trigger if you pay your loan earlier than agreed upon. Ensure that you will not be stuck with high fees if you decide to refinance your current loan.

How to refinance an auto loan

To successfully refinance your auto loan, follow these steps:

1. Decide if refinancing is the right financing move: There are two main situations where refi makes sense: you can secure a better rate or you need a lower monthly payment.

2. Review your current loan: Most lenders require a minimum of $3,000 to $5,000 in order to refinance, check your payoff amount along with your terms before starting the process.

3. Check your credit score: Check your credit score to see if it has improved since your original loan approval. The higher your credit score, the better your new rate will be. While you can still refinance with bad credit, you'll want to consider the risks first.

4. Estimate your car's value: Estimate your vehicle’s value and compare it with how much you owe on your loan. If you’re upside-down — meaning you owe more than the car’s worth — you’ll struggle to refinance.

5. Determine your savings: 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.

6. Get your paperwork in order: Gather the necessary documentation and details of the current loan so you can walk away with better rates and terms.

How to choose the best auto loan refinancing lender

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 across multiple lenders. Look for lenders that keep fees to a minimum and offer repayment terms that fit your needs.

Every lender has different refinancing 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.
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.
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.

Alternatives to refinancing your auto loan

If the goal is to lower your monthly payment, there are a number of other routes available outside of refinancing. If you cannot find a more competitive rate and term or do not qualify, consider these four options.

Request a loan modification: If you are struggling to stay afloat financially due to your current monthly payments, reaching out to your lender can be a solution. Write a hardship letter detailing the challenges and you may be able to get a loan modification.
Trade in your vehicle for a less expensive car: As long as your current loan is not upside down, trading it in for a cheaper option can save you money.
Sell your vehicle privately for a less expensive option: Similarly, selling your vehicle privately can result in less expensive monthly payments, though it can be more fraught than a dealer trade-in.
Switch to leasing over buying: Although leasing has its own downsides, it is cheaper than buying.

FAQs about auto loan refinance

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. Your new loan balance will reflect what you owed at the time you refinanced, not your original one.

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, vehicle 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.

How we choose our best auto loan refinance lenders

Bankrate's trusted auto loans industry expertise

Read our full methodology

years in business

lenders reviewed

loan features weighed

496

data points collected

The Bankrate team assessed more than 30 auto refinance lenders to find the best. Bankrate considered 16 criteria, such as acceptance criteria, loan amounts and APR range. These scores are broken into four categories.

Loan amounts, repayment options, dealership requirements and state availability all contribute to this category. Lenders that serve customers nationwide with flexible loan amounts rank higher.
This section houses APR ranges, acceptance criteria, fees and discounts. Lenders with the lowest rates, fewer fees and most generous acceptance criteria receive higher scores.
Our team looked at how easy it is for customers to apply for and manage their loans. Criteria include how long you have to shop, customer service hours, whether there’s an app and autopay availability.
This includes prequalification and disclosure of rates and fees. We favored lenders that make it easy for customers to preview possible costs.

Best auto loan refinance rates for October 2024

Compare auto loan refinance lenders in October 2024

A closer look at our top auto loan refinancing lenders

LightStream: Best for fast funding

Who its for

Stand-out features

Pros & Cons

Pros

Cons

Eligibility & More

Autopay: Bankrate award winner for best auto loan online lender

Who its for

Stand-out features

Pros & Cons

Pros

Cons

Eligibility & More

Caribou: Best for fair credit loan comparison

Who its for

Stand-out features

Pros & Cons

Pros

Cons

Eligibility & More

RefiJet: Best for dedicated customer support

Who its for

Stand-out features

What is auto refinancing?

Pros and cons of refinancing an auto loan

Pros

Cons

When should you refinance your car loan?

When should you not refinance your car loan?

How to refinance an auto loan

How to choose the best auto loan refinancing lender

Approval requirements

Your current loan

Repayment options

Alternatives to refinancing your auto loan

FAQs about auto loan refinance

Does refinancing my car hurt my credit?

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

Does refinancing start your auto loan over?

Do I need cash to refinance?

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

How we choose our best auto loan refinance lenders

Bankrate's trusted auto loans industry expertise

Availability

Affordability

Customer experience

Transparency