The 5 Best Auto Refinance Loans of 2020

Get a better rate or cash out for extra capital

We publish unbiased product reviews; our opinions are our own and are not influenced by payment we receive from our advertisering partners. Learn more about how we review products and read our advertiser disclosure for how we make money.

Refinancing your auto loan can help you lower your interest rate, reduce your monthly payment, and reduce the total amount of interest you pay on your car loan. Whether you're looking to free up cash flow or pay off your loan faster, an auto refinance can be a good option, especially in the current low-rate environment.

To create this list of the best auto refinance loans, we looked at auto loan products from 15 lenders and compared key factors, including APRs, minimum loan amounts, repayment terms, credit score requirements, and more.

The 5 Best Auto Refinance Loans of 2020

Best Refinance Rates: OpenRoad Lending

OpenRoad Lending specializes in auto refinancing, offering traditional and cash-back refinancing options and a wide range of loan terms. Borrowers with excellent credit can refinance into some of the lowest rates available. In addition, it provides financing options for individuals across the credit spectrum.

Key Information

  • APR: As low as 1.99%
  • Minimum loan amount: $7,500 in most states
  • Repayment terms: Up to 72 months
  • Recommended credit score: Not disclosed 
  • Availability: Nationwide
Pros
  • Low rates

  • No application fees

  • Specializes in auto refinancing

  • Online application

Cons
  • Minimum refinance amount of $7,500

  • Refinance restrictions on vehicle mileage, age, and brand

Founded in 2009, OpenRoad Lending specializes in auto refinance loans and offers a range of car-related financial products. Rates for refinancing start as low as 1.99% for terms of up to 24 months. OpenRoad Lending says that on average its customers save 5.6% off of their existing APR.

Its traditional refinance product is open to borrowers of all credit ratings. There's also a cash-back refinancing option, which allows borrowers to get up to $5,000 cash back by refinancing their existing loan. 

In order to refinance with OpenRoad Lending, you must be financing a minimum of $7,500 and a maximum of $100,000 for a vehicle that is eight model years old or newer. The vehicle must also have less than 140,000 miles. Borrowers need a gross monthly income of at least $1,500 and can’t be self-employed. OpenRoad won’t refinance vehicles that are no longer being manufactured, commercial vehicles, recreational vehicles, or motorcycles. 

You can apply for a loan through OpenRoad Lending via its online application or over the phone.

Best Auto Refinance for Bad Credit: RoadLoans

Minimal credit requirements and flexible loan amounts make RoadLoans a worthwhile option for borrowers with less-than-perfect credit. It also offers a quick online application and approval process—it takes anywhere from 24 to 48 hours for your application to be approved or denied.

Key Information 

  • APR range: Not disclosed
  • Minimum loan amount: $5,000
  • Repayment terms: Up to 72 months
  • Recommended credit score: No credit requirements 
  • Availability: Not available in Alaska, Hawaii, New Hampshire, Mississippi, and Nevada 
Pros
  • No credit requirements

  • Online application and approval

  • Offers both traditional and cash-back refinancing

Cons
  • Not available in certain states

  • Doesn't disclose interest rates

RoadLoans is a direct-to-consumer online lender based in Dallas and owned and operated by Santander Consumer USA. Its traditional and cash-back refinance loans have no credit requirements. The minimum loan amount is $5,000, while the maximum is $75,000, and loans are available in most states. 

Because of its lack of credit requirements, RoadLoans offers borrowers with poor credit the chance to refinance a car loan with little hassle. Indeed, those looking to refinance can get approved for a loan within 24 to 48 hours after submitting an application. 

RoadLoans doesn’t publish rates on its site, but rates are generally higher on loans that go to borrowers with bad credit. The tradeoff is that RoadLoans removes credit as a barrier to refinancing, making it a solid option for poor-credit borrowers who might not be able to get a loan elsewhere. 

Best Bank for Auto Refinance: Bank of America

Among big banks, Bank of America offers competitive refinance rates and an easy overall process. It's open to borrowers throughout the nation and it gets better-than-average scores in J.D. Power's 2020 U.S. Consumer Lending Satisfaction Survey.

Key Information

  • APR range: As low as 3.69% APR
  • Minimum loan amount: $7,500 for purchase ($8,000 in Minnesota)
  • Repayment terms: 12 to 75 months
  • Recommended credit score: Not disclosed 
  • Availability: All 50 states
Pros
  • Competitive rates

  • Online application

  • Transparent rates and terms online

  • Established financial institution

Cons
  • Minimum finance amount of $7,500

  • Must have fewer than 125,000 miles

  • Car can't be valued at less than $6,000

Bank of America (BofA) offers a number of car loan refinance options. Borrowers can refinance any existing auto loan, whether the original loan is through BofA or another institution. Its rates for refinances start at 3.69%. Preferred Rewards customers of the bank can get up to a 0.5% discount on their rate.

The main disadvantage to getting an auto loan through Bank of America is its restrictions on which vehicles it will finance. It won't provide loans for vehicles over 10 years old, for vehicles with 125,000 miles or more, or for vehicles worth less than $6,000. It also won't provide a loan amount of less than $7,500 ($8,000 in Minnesota).

Those interested in refinancing through BofA can start the application process online. Bank of America says the application takes about 60 seconds. Once approved, payment is sent directly to the loan holder. Its online application allows for 48-, 60-, and 72-month terms, but it has more options if you apply in a branch or over the phone.

Best Credit Union for Auto Refinance: PenFed Credit Union

Members of PenFed get access to very competitive refinance rates. There's a convenient online application for refinances, and borrowers can finance up to 100% of their vehicle.

Key Information

  •  APR range: As low as 2.14% APR
  • Minimum loan amount: $500
  • Repayment terms: 36 to 84 months
  • Recommended credit score: Not disclosed 
  • Availability: All 50 states
Pros
  • Offers a wide range of options

  • Competitive rates

  • Loan amounts from $500 to $100,000

  • Online application

  • Borrow up to 100% of the vehicle's value

Cons
  • High minimum loan amount for longer terms

  • Excellent credit history required for lowest rates

  • Membership in the credit union is required

For members of the credit union, PenFed provides a wide range of loan terms and very competitive rates. Refinance rates for 2019 and 2020 model years start as low as 2.14% for a 36-month loan for loan amounts ranging from $500 to $100,000. Rates start as 2.99% for vehicles with a model year of 2018 or earlier.

Rates and minimum loan amounts at PenFed increase as the refinancing term increases. For example, an 84-month refinance loan with a model year of 2019 or 2020 comes with a rate starting at 4.49%, up from 2.14% on a 36-month loan. As with most lenders, borrowers need excellent credit in order to get the lowest rates.

Keep in mind that membership in the credit union is required in order to refinance an auto loan. Membership is open to current and former military and their families. Those with no military affiliation can join by making a one-time donation to the National Military Family Association or a $15 donation to Voices for America's Troops. You also need to open a savings/share account with at least $5.

Best Online Refinance Loan: LightStream

LightStream offers competitive rates, a wide range of refinance options, and an entirely online process for refinancing. It also gets strong customer service ratings, receiving a top score in the J.D. Power 2020 Customer Lending Satisfaction Survey.

Key Information

  • APR range: As low as 3.49% with autopay
  • Minimum loan amount: $5,000
  • Repayment terms: 24 to 84 months
  • Recommended credit score: Not disclosed 
  • Availability: All 50 states
Pros
  • Completely online process

  • 0.5% discount with auto pay

  • Same-day funding

  • No restrictions on make, model, or mileage

Cons
  • Online application only

  • Requires a hard credit pull

LightStream, the online lending arm of SunTrust Bank, offers a completely online lending process. Borrowers can receive a direct deposit as soon as the same day. For those with excellent credit, LightStream offers some of the most competitive refinance rates available with a wide range of loan terms. There are also no major restrictions on the type of vehicle you can refinance.

Rates from LightStream start as low as 3.49% on 24- to 36-month loans of $10,000 to $24,999. That’s with its autopay option. If you don’t opt for autopay, LighStream’s quoted rates increase by 0.50% points. You can finance loan amounts as low as $5,000 or as high as $100,000. Loans can’t be used to finance an existing LightStream loan. 

Keep in mind that LightStream requires a "hard pull" on your credit upfront. Hard credit pulls can slightly lower your credit score. Some lenders only require a soft pull on your credit.

Can You Refinance a Car Loan? 

If you aren't happy with your current car loan, you can refinance into a loan with a different interest rate and new terms.

Refinancing a car loan means taking out a new loan that replaces your existing loan. It's a brand-new loan that you often get from a different lender. Depending on the new lender's requirements, you might be able to keep the length of the loan the same, shorten it, or extend it.

When you refinance, your new loan amount will generally be the balance you have left on your current loan. However, some lenders allow for a cash-out refinance. Just keep in mind that taking out cash on a car with limited equity could cause you to owe more on the vehicle than it's worth.

Should You Refinance Your Car?

Whether you should refinance your car loan depends on your situation.

Here's when it's beneficial to refinance your auto loan:

  • If interest rates have dropped. Refinancing into a lower rate can reduce the overall interest costs on your loan.
  • If you want to lower your monthly payments. Getting a new loan can help you free up cash for bills and other costs.
  • Your credit has improved since you purchased the vehicle. If your credit score has jumped up since you first purchased your vehicle, you might be able to get a better loan.

Here's when it's not beneficial to refinance your auto loan:

  • If you're going into negative equity. You don't want to owe more on the car than it's worth. If refinancing will put you upside-down on your car loan, consider other options.
  • Extending the loan term. Lengthening the term of your car loan typically will cause you to pay more interest over the life of the loan and more for your car. Though longer terms can lower your monthly payment, long-term loans are generally more expensive.

When Should You Refinance a Car?

When to refinance depends on your circumstances and needs. Refinancing could make sense if your credit score has recently improved, if car loan rates have fallen, or if you need a lower monthly payment. 

Overall, consider refinancing when you can get a better deal on your car loan and it won't cause you to pay more for the vehicle.

How Can You Refinance an Auto Loan?

Each lender has its own process and requirements for refinancing auto loans. However, the steps to refinance are generally similar to taking out an initial car loan. Here’s what the refinance process looks like:

  1. Check your credit report. Fixing any errors on your credit report may help raise your credit score. Lenders largely determine the rate you receive based on your credit, so any improvements to your credit will lead to lower rates and bigger savings on your loan in the long run.
  2. Gather documents and information about your existing loan and your current vehicle.
  3. Shop refinance loans at multiple lenders and get preapproved. Include online lenders, big banks, credit unions, and community banks in your search. Any lender with competitive rates and fees is worth consideration. Remember, credit inquiries within a 14- to 45-day period count as a single inquiry on your credit report.
  4. Decide on a lender. Sign your new contract and send any supporting documents needed, including proof of income.

Can You Refinance Your Auto Loan With Your Existing Lender?

The rules for refinancing an existing loan with the same lender vary by financial institution. PenFed Credit Union, for example, does not allow refinancing for cars already financed with the credit union. Other lenders do allow borrowers to refinance an existing loan.

Keep in mind that it may not always be beneficial to refinance with the same lender. You might find a better deal by refinancing with another institution.

Can You Refinance a Car Loan With Bad Credit?

Yes, several lenders offer auto loan refinance options for borrowers with bad credit. Some lenders don't even have a credit requirement in order to get a loan.

When applying for these loans, watch out for high interest rates. Many loans for borrowers with poor credit come with high annual percentage rates that can add significantly to the cost of the loan.

Bottom Line

Refinancing your auto loan can help you decrease your payments and the amount of interest you pay over the life of the loan. But whether you should refinance depends on your situation. If you decide that refinancing is the right move for you, seek out a lender and loan terms that meet your needs and help improve your overall financial picture.   

How We Chose the Auto Refinance Loan Providers

To choose the lenders featured on this list, we evaluated loan offerings from 15 different auto refinance lenders using several criteria. First, we looked at auto loan rates and loan options available to borrowers. We also considered loan amount ranges, loan types offered, availability, repayment term options, and credit score requirements. We also reviewed customer service satisfaction.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy .
  1. J.D. Power. "Consumer Lending Satisfaction Hinges on Trust, Ease of Access Now More Than Ever Before, J.D. Power Finds." Accessed June 11, 2020.

  2. J.D. Power. "Consumer Lending Satisfaction Hinges on Trust, Ease of Access Now More Than Ever Before, J.D. Power Finds." Accessed June 11, 2020.