If you need to buy a new car fast, you may end up accepting an auto loan with a high interest rate just to close the deal. But paying more for a new car than you should can end up costing you extra money: More importantly, money that you could either be saving or using to pay off other bills in the meantime.
If you are facing high car payments month after month because of your auto loan's high interest rate, you may be qualified to refinance your auto loan at a lower interest rate, especially if your creditworthiness has increased since you bought the car. Refinancing can help you lower your interest rate or change the length of your loan. However, it is important to keep in mind that, while extending your loan may lower your payments for the duration of your loan, in the long-term it may end up costing you more. This is because with more payments, you could pay more in total interest over the life of the loan.
- If you are facing high car payments month after month because of your auto loan's high interest rate, you may be qualified to refinance your auto loan at a lower interest rate, especially if your creditworthiness has increased since you bought the car.
- Refinancing can help you lower your interest rate or change the length of your loan.
- USAA, Autopay, CarsDirect, RoadLoans, and Lightstream are all companies that offer auto loan refinancing.
If you are considering refinancing, here are some options for companies that may be able to help you find a lower rate. And while most people refinance with a new lender, you may want to consider checking with your current lender as well about refinancing options.
The United Services Automobile Association (USAA) offers up to 84-month auto refinance loans with rates as low as 2.59% on 2019 or newer models. For 2018 or older models, loans are available in terms up to 72 months at rates starting at 2.99%. You must be a USAA member—people and families who serve or served in the United States military—to qualify for these loans.
Some loan approvals are instant, and you can get an answer to your application in about five minutes. After e-signing your loan documents in your USAA account, you can print out your loan check instantly or send the payoff amount to your dealer by using your smartphone. USAA does not charge an application fee, and you won't have to make payments on your new loan for up to 60 days.
Customer reviews on LendingTree give USAA 1.9 out of 5 stars.
Autopay is a lender marketplace that partners with credit unions and other financial institutions to offer loans at various interest rates based on your credit profile. If you want to maintain a traditional loan, Autopay can help you find better interest rates from a lender that suits your needs.
Autopay offers traditional refinancing and cash-back refinancing. With traditional refinancing, consumers may be able to substantially reduce their monthly payments, drop their interest rates, and potentially shorten the length of their loans.
Cash-back refinancing through Autopay can help you to get up to $12,000 in cash that you can use to pay off other debts. If you plan to keep a leased car at the end of a lease, the lease payoff option allows you to pay off your lease early and avoid costly mileage fees. It's important for consumers to know that while cash-back refinancing options give you cash back for taking out a larger loan than you need, you may risk owing more than your car is worth.
Customer reviews on LendingTree give Autopay 4.5 out of 5 stars.
CarsDirect specializes in helping people with bad credit find lenders to finance and refinance their vehicles. The process begins by filling out an online application that provides CarsDirect with some basic information about your gross monthly income, employment, and housing payment. You will also need to give the company permission to pull your credit. A credit processor will contact you with more information about the loans for which you qualify.
When you decide to work with a lender, you will probably have to provide additional documentation, such as proof of your income, residence, and insurance. The interest rate on the loan offer you receive depends on your credit score.
Reviews on Consumer Affair's website give the service high marks for having a fast and easy application process.
RoadLoans offers both traditional and cash-back refinancing options. The RoadLoans traditional refinancing option allows consumers to lower their APR and monthly car loan. As an added perk, you can skip payments on your new car loan for up to 60 days. The cash-back refinancing option allows you to borrow more than you owe (up to the full value of your car). However, the cash-back option is not available in all states. RoadLoans takes applicants with a wide range of credit backgrounds, so interest rates will vary.
As of June 2020, RoadLoans had an overall rating of 4 out of 5 stars on the Consumer Affairs website.
LightStream is a division of SunTrust Banks Inc. As of June 2020, the lender offers auto refinance rates between 3.49 and 7.79% APR for 24 to 36 months, and up to 4.69 to 9.49% for 73 to 84 months, depending on the loan amount. Rates include a discount for autopay.
LightStream offers unsecured auto refinance loans for borrowers with excellent credit, but borrowers with less-than-stellar credit can qualify for secured auto loans. You can borrow from $5,000 to $100,000 to refinance a loan on any car through an entirely online application process.
LightStream also offers the added perk of a "RateBeat" program. They will match any other lender’s interest rate (APR) by 0.10 percent if the loan is for the same amount, term, and purpose (as long as you have been officially approved by the other lender).