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Best Auto Refinance Loans for Excellent Credit of 2022

Sarah Moore

Refinancing your car can save you money by lowering your interest rate, reducing your monthly payment, and lowering the total amount of interest you pay on your loan. We’ve evaluated the best auto refinance loans based on rates, terms, loan options, customer reviews, and overall quality.

Personalized quote in a few minutes

2.32% - 21.24%

Est. APR

650

Min. Credit Score

$5,000 - $100,000

Loan Amount

Overview

Caribou connects you with a network of auto loan lenders, so you can save time and compare multiple quotes in just a few clicks.

What we like

  • No SSN required
  • Prequalify with a soft credit check
  • Online application process
  • Accepts co-borrowers

What we don't

  • Processing fees
  • Vehicle restrictions
  • No customer support on weekends

Easy online application

2.25% - 29.99%

Est. APR

510

Min. Credit Score

$9,000 - $60,000

Loan Amount

Overview

Upstart uses leading AI technology to assess the true risk of a borrower and improve access to affordable credit.

What we like

  • Easy online application
  • Soft credit inquiry
  • Flexible loan amounts and terms
  • Considers variables in addition to credit history
  • Low minimum credit score requirement

What we don't

  • Low maximum loan amount
  • Co-borrowers not allowed
  • Only personal income considered

When you check your rate, we check your credit report. This initial (soft) inquiry will not affect your credit score. If you accept your rate and proceed with your application, we do another (hard) credit inquiry that will impact your credit score. If you take out a loan, repayment information will be reported to the credit bureaus.

Although educational information is collected as part of Upstart’s rate check process, neither Upstart nor its bank partners have a minimum educational attainment requirement in order to be eligible for a loan.

The full range of available rates varies by state. The average 5-year loan offered on Upstart will have an APR of 10.56% and 60 monthly payments of $463 per $20,000 borrowed. For example, the total cost of a $20,000 loan would be $27,795. APR is calculated based on.

5-year rates offered in April 2022. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.

Directly pays your existing auto loan

3.69% - 9.84%

Est. APR

550

Min. Credit Score

$5,000 - $100,000

Loan Amount

Overview

Upgrade will assist you in refinancing your current auto loan at a cheaper interest rate by using loans from its bank partners.

What we like

  • Direct repayment of existing auto loan
  • No prepayment penalties
  • Easy online application process
  • View rates without hard credit check

What we don't

  • Loan terms not revealed before application
  • Only personal vehicles allowed
  • Loans not offered for new purchases

No restrictions on age or mileage

Varies

Est. APR

660

Min. Credit Score

$5,000 - $100,000

Loan Amount

Overview

LightStream Auto Loans are a good fit for borrowers that are looking for same-day funding and no vehicle restrictions on age or mileage.

What we like

  • Same-day funding available
  • Power to negotiate as a cash buyer
  • AutoPay discount
  • No restrictions on age or mileage
  • No fees

What we don't

  • Pre-qualification not available
  • Excellent credit is required for the lowest rates

Should you refinance your car?

If you’re considering refinancing your car, know that there are many reasons why it could make sense for you. Here are some of the most common reasons people refinance their cars:

  • Low-interest rates: If you can refinance into a new auto loan with a lower interest rate, it could save you hundreds or even thousands of dollars over the life of your loan.
  • Repayment terms: If the new terms of your financing are better than those offered by your original lender or dealer, then refinancing could help save money. You’ll have more flexibility with interest rates and fees, plus you might be able to get a lower payment or longer repayment period if you’re having trouble making payments now.
  • Paying off your car loan sooner: When you refinance your car, the interest you pay each month may decrease or stay the same. If you have enough equity in your car and a good credit score, refinancing could allow you to pay off your loan sooner and save money on interest payments.

What is considered excellent credit?

Excellent credit is characterized by a FICO score of 800 or above. This is the highest FICO score and denotes that you have very few blemishes on your credit report. You may be able to get approved for the best rates and terms when applying for loans, credit cards, or mortgages.

Your credit score is not the same as your credit report. Your credit report contains all the information about your current loans, mortgages, and credit cards, plus any late payments or public record items associated with each account. Your credit score is based on the information in your report and ranges from 300-850.

When can you refinance a car loan?

Let’s look at some of the ideal situations to refinance your auto loan:

  • Credit has improved: If your credit has improved since you took out the loan, you may be able to refinance your car loan at a lower interest rate. Credit scores look at more than just the amount of debt you have — they also consider how long you’ve had that debt and whether or not you’ve been making payments on time.
  • Can’t afford your current payments: If you need to get a longer term to stretch out monthly payments, this can help you afford the monthly fees, but it will also make the total cost of your loan go up.
  • Interest rates have dropped: One of the best times to do refinance is when interest rates drop. If you’re able to get a lower interest rate, it could save you hundreds or even thousands of dollars over the life of your loan.
  • Remove a cosigner: If you want to remove a cosigner, refinancing can help.

How do you refinance a car loan?

Here’s how it works:

  • Review your credit: Before refinancing a car loan, ensure that your credit is in good shape. Lenders will check your credit report before approving a new loan. If there are any errors or problems on your report, it can delay the process or prevent it altogether.
  • Apply: To refinance your car loan, you must apply online or contact your lender directly. You’ll need to provide information about your current loan (the amount owed, the interest rate) and any other loans you have with the same lender (if applicable). This will help determine if the lender will approve the refinance application and what type of new loan terms will be available for you.
  • Get your paperwork in order and apply: Once you’ve found a lender that has offered you a rate that works for you, it’s time to get all your paperwork together, so you can apply online, over the phone, or in person. This includes verifying your employment status, income, and assets. You’ll also need proof of insurance on your vehicle.
  • Review the terms and sign the contract: Before signing any contract, review all terms carefully, so there are no surprises later on down the road. Ensure that you understand exactly how much those payments cost each month. 
  • Confirm how the loan will be paid off: When refinancing an auto loan, it’s important that you understand how much money you’ll owe at each stage of the process. You should also check to see if any fees are associated with refinancing your loan. Some lenders charge application fees or closing costs. 

Does refinancing hurt your credit?

In most cases, refinancing your car has little impact on your credit score as it’ll only temporarily negatively affect it during a hard credit pull, but it can improve it in the long run.

Since refinancing doesn’t increase your overall debt payments but frees up more money if you got a lower rate, it can help bring down the debt-to-income ratio and improve your score.

Can you refinance if you owe more than your car is worth?

Yes, you may be able to refinance your car even with an upside-down car loan, though it will depend on how much you owe.

If you have negative equity in your car, it means you owe more than the car is worth. The amount of negative equity can vary depending on how long you’ve had the car and how much the vehicle has depreciated since you bought it.

Most lenders use a formula called “residual value” when calculating what amount of money they’ll lend you for a used vehicle. Residual value is what a lender thinks your car will be worth at the end of its term.

How to choose the best auto refinance loans for excellent credit

If you are looking to refinance your current auto loan, there are several things you should know before choosing a lender:

  • Refinancing requirements: If you have excellent credit, you should be able to refinance your auto loan without any problems. However, some factors will affect how much money you can borrow and what kind of interest rate you’ll receive.
  • Interest rates: The interest rate determines how much money will be charged overtime on your loan. This is also called the APR (annual percentage rate). The lower the APR, the better it is for your budget. Check with different lenders and compare their rates before deciding on one.
  • Customer service: This is a critical factor when choosing to refinance your auto loan because you will be dealing with them regularly, so it’s important that they are available to answer any questions that you may have and provide guidance as needed.
  • Car’s value: Your car’s value is one of the most important factors in determining your auto refinance loan’s interest rate. You can expect a lower interest rate if your car has a higher value. However, if your car has a lower value, it may be harder for you to get approved for an auto refinance loan.
  • Fees: If you have excellent credit, you could refinance your car and pay zero fees, but that’s not always the case. Some lenders will charge a fee just to consider you for a loan. The average amount of this fee can vary greatly depending on the lender and the loan amount.