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Best Auto Refinance Loans for Good 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?

Here are some of the benefits of refinancing:

  • Lower monthly payment: When refinancing a car loan, you could get better terms from another lender and use those terms to pay off the rest of your outstanding debt. This could lead to lower payments overall and help you save money in the long run.
  • Lower interest rate: If your current interest rate is high, refinancing could help lower it, provided the new lender has a lower rate. Lowering your interest rate can make a big difference in how much money you pay each month toward your loan balance.
  • Making car payments more manageable: If you’re struggling to make ends meet each month, refinancing can help alleviate some of the pressure by spreading out payments over several years instead of just one or two years. For example, if your current loan has payments every two weeks, but you’d prefer monthly payments, refinancing could give you what you want without changing the amount owed on your current loan or vehicle itself.

What is considered good credit?

A credit score of 670 to 739 is considered to be good. This range will look pretty good on your credit report and could help you get approved for loans and credit cards easier.

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?

You can refinance at any time, but there are some situations where you should consider refinancing your auto loan:

  • Interest rates have dropped: If interest rates have dropped since you first took out your loan — even just a few points — it’s worth checking if you can refinance.
  • You didn’t get the best offer the first time: If you’ve refinanced your car loan once, then it’s possible that you didn’t get as good of an offer as you could have gotten by shopping around. It’s worth it to go back to some of the lenders that gave you quotes previously and see if they can beat their previous offers.
  • Financial situation has improved: If your credit score increase, it might make sense to refinance your car loan and get a lower interest rate. You’ll have better terms.
  • Remove a cosigner: If you want to remove a cosigner, refinancing can help.

How do you refinance a car loan?

Here are the steps to refinance your auto loan:

  • Apply for a new auto loan: Once you know which lender has the lowest rate, it’s time to apply for the loan. You can typically apply for an auto loan online or over the phone.
  • 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. 

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. The process can be a little more complicated than refinancing your house or securing a mortgage on a different property, but it’s doable. After all, the loan on your car is still a loan and should be treated like any other debt you may have. You can refinance it if you’ve paid it down sufficiently. It’s always wise to consult with your lender before beginning the refinance process.

An upside-down loan is one where the car’s value has depreciated past the point where it’s worth less than the outstanding balance loan. Lenders know cars depreciate quickly. Cars depreciate in value quickly and lose about 20% of their value in the first year and around 50% to 60% after five years.

How to choose the best auto refinance loans for good credit

You need to consider several factors when looking for an auto refinance loan. Here some tips:

  • Prepayment penalties: While most auto refinance loans do not have prepayment penalties, checking with your lender before signing anything is important. Some lenders will charge a fee if you pay off the loan early, so be sure to ask about this before applying for any loans.
  • Loan repayment term: A longer repayment period means lower monthly payments but higher lifetime loan costs and vice versa for a shorter term period.
  • Reputable lender: Reputable lenders will have many customer reviews on their websites or through other websites such as Yelp or Google Reviews. Searching for these reviews before choosing any lender will give you an idea of how long the company has been in business and whether or not they have satisfied customers who have used them in the past.
  • Compare rates: Compare the lender’s interest rates and repayment terms before deciding which one you would like to use.