When you refinance your auto loan, you replace your current loan with a new one from another lender, possibly with a lower interest rate. You can also shorten, extend, or keep the length of loan the same as the number of months that you have remaining on your current loan.
Typically, the new loan amount will be the balance that’s left on your current loan. However, some lenders will let you take out cash when you refinance. Since there usually isn’t a lot of equity in a car loan, you might end up increasing your risk of owing more than your car is worth when you take out cash.
Either way, receiving auto loan refinancing can help you lower your monthly payments and adjust the terms of your auto loan. But with so many options out there when it comes to auto refinancing companies, it’s easy to get overwhelmed.
Luckily, we’re here to help. So continue reading and we’ll walk you through some auto loan refinancing options of 2020.
If you’ve got good credit, then you can take full advantage of it. Whether you’ve had good credit for most of your adult life, or it’s due to a tireless dedication to paying off your debts, now’s the time for you to go out and receive a lower interest rate on your auto loan.
A division of SunTrust Bank, LightStream serves customers with good to excellent credit. In order to use LightStream’s services, you need to have a minimum FICO score of 660.
LightStream executes a hard pull on your credit when you apply. So you should be prepared with a decision when they make that pull.
A hard inquiry can cause your credit score to fall slightly. While this isn’t usually a big deal, it can become a problem if you apply for new credit multiple times in a short period.
But with the autopay discount, LightStream’s APR starts at only 3.49%. And their auto loan refinancing service is available in all 50 states.
Unlike LighStream, CarFinance.com caters to people who have poor credit. This will allow you to discuss your refinancing options in a judgment-free environment.
They also have a convenient and easy to use feature – LoanDriver. LoanDriver lets you upload all of your application papers and also stay up to date with the status of your loan application.
During business hours, CarFinance.com will be able to give you a loan decision in less than thirty minutes. If your interest rates were higher when you bought your vehicle, or if your credit score has gone up, then you should apply for a loan.
You need to be current on your loan payments for six months in order to have the best chance of approval as well as to get the best rate. Also, qualifying cars need to have less than 140,000 miles on the odometer and be less than ten years old.
After you complete Capital One’s quick and easy survey, you’ll be able to see if you qualify to refinance your auto loan without impacting your credit score at all.
You’ll end up owing more with Capital One than with other loan refinancing companies on this list, though. But you’ll be able to see what types of rates you would get and you can pre-qualify without a hard credit inquiry affecting your credit score.
After you pre-qualify, you’ll submit your credit application. This involves choosing the length of the loan as well as the corresponding APR. This will be posted to your consumer credit report.
You’ll then complete the deal when you provide your VIN, virtually sign the contract, provide your lender details, and send in supporting information such as proof of insurance. Capital One doesn’t charge an application fee. Instead, each state charges a variable fee for title transfer.
Thankfully, Capital One will pay that fee. They’ll then add that fee into your final loan amount so you won’t have to pay out of pocket at the time of your refinancing.
Bank of America
If you choose to get an auto loan refinancing from Bank of America, you’ll get a decision very quickly. Plus, you’re getting your refinancing from one of the most trusted financial institutions in the country. There are no fees to apply and you can take advantage of all of their helpful online features after you become a Bank of America customer.
In order to qualify for auto loan refinancing with Bank of America, your car will need to have less than 130,000 miles on it. It will also have to be less than ten years old. You’ll also need to have at least $5,000 left on your current auto loan.
The current APR for refinancing a car with Bank of America is 3.69% for many states. For the specific rate in your state, check their website. A smart move would be to pay off your current loan with the money you save from a new loan. This will enable you to take advantage of lower interest rates, lower monthly payments, and save on financing expenses.
You can use a car loan calculator and compare prices in order to determine how much you would save.
AutoPay’s specialty is in auto loan refinancing. So it makes a lot of sense why they would deliver fantastic deals to their customers. AutoPay tends to cater to customers who have increased their credit scores since they took on their original auto loans.
Because of this, AutoPay usually has the ability to provide big discounts on auto refinance loans. On the company’s website, people are able to compare offers for loans from all different companies. And you don’t have to fill out more than one application.
AutoPay performs a soft pull on your credit, so it won’t affect your credit score. And if you’re not seriously thinking about refinancing your auto loan immediately, then you could benefit from this too.
It’s important to point out that AutoPay will execute a hard check when you pick a final offer. But that won’t be until you’re ready to commit anyway.
It’s also easy to shop around with AutoPay. And the company typically partners up with credit unions.
The lowest rate that AutoPay offers is 1.99%. But that’s only available for people who have excellent credit.
The average rate of interest on an AutoPay loan is 5.50%. And the average credit score of an AutoPay client is 705. By knowing what your credit score is before you start shopping around, you’ll have an easier time estimating what your APR will likely be when refinancing your auto loan.
Right off the bat, it’s important to know that USAA only serves members of the military or relatives of military members. But if you or a qualifying relative has served our country, then you should certainly consider this nearly century-old company. USAA is well known for its great customer service and hard-to-beat rates.
After you start your auto refinance loan, you won’t have to pay for a maximum of sixty days. This will give you time to catch up if you’re behind. You also have the ability to choose from a variety of their vehicle protection plans, if that’s something you’re interested in as well.
With USAA, you can get refinancing for up to sixty months. And there are terms available that are even longer. This company makes refinancing easy thanks to the fact that they work directly with your lender.
You can find USAA’s rates right on their website. When you include the 0.25% discount that comes with selecting autopay, rates with USAA start at just 3.05% APR.
It’s worth knowing that these rates can be changed without notice. And the actual rate will vary depending on approved credit and other factors, such as loan amount, model year, and term of the loan.
If you’re looking for peer-to-peer lending, then look no further than LendingClub. While this type of lending isn’t a traditional option, it’s a great choice for people who want to work directly with an individual lender for a specific amount of time.
With that said, LendingClub isn’t a great option for people who don’t owe a lot of money on their current auto loan. The loans from LendingClub go all the way up to $100,000. But you won’t get a loan for less than $5,000 for auto loan refinancing.
LendingClub does offer loans to people who have credit scores that are less than 510. However, you are going to have to pay a good amount for that privilege.
Many people decide to go with LendingClub because they offer low-interest rates and they’re easier to work with than more traditional financing options. You also don’t have to worry about prepayment penalties, hidden fees, or rude customer service when you patronize LendingClub.
Consumers Credit Union
Because this a credit union, you’re going to have to actually be a member of Consumers Credit Union in order to take advantage of their auto loan refinancing services. However, after you become a Consumers Credit Union member, you’ll soon be flooded with perks and benefits.
Unlike most other banks and auto loan refinance lenders, the loan terms from Consumers Credit Union are extremely flexible. This is especially true if you don’t have to borrow a lot of money. CCU will lend you as little as $250 for just six months at a time.
They will execute a hard check on your credit score, so you want to make sure that you’re serious about refinancing with them before you see what rate they’ll give you. Otherwise, your credit might suffer.
After they check your credit, though, they’ll work with you as long as you have a credit score that’s over 650. The current APR for auto loan refinancing starts at just 2.50%. Of course, your credit history and the length of your loan will affect your actual APR.
The Importance of Knowing About Your Auto Loan Refinancing Options
If you have an auto loan that you want to refinance, it’s crucial that you select a lender that will give you the best deal available. If you don’t, then you may not be saving as much as you should be. And when you go shopping for loans, it’s important that you explore your options when it comes to auto refinancing companies.
So make sure that you go over the above list and see which companies are most likely to fit your lifestyle and financial needs. And even if you don’t think you need to do any auto loan refinancing right now, it’s still good to know what your options are. After all, we could all benefit from saving more money.