Refinance my car loan
CarEdge works with lenders to offer the best auto refinance rates so we can find you better auto loan terms depending on your situation.
Refinance my car loan
CarEdge works with lenders to offer the best auto refinance rates so we can find you better auto loan terms depending on your situation.
Why refinance my car loan?
Refinancing your car loan can save you money monthly, in the long run, or both.
Your options for refinancing your car loan
How does refinancing my car work?
By transferring your current loan to a loan with better terms you can save money.
Apply for a new loan with better terms
If you are approved, see your final terms
Send your required documents
Enjoy the money you’ll be saving!
How we picked these lenders
We selected these lenders based on factors that may be important to people who want to refinance their auto loan, such:
- Competitive rates
- Range of refinance loan types and amounts
- Whether the lender considers a range of credit profiles
- Ability to apply for pre-qualification to see estimated rates and loan terms without affecting credit scores
- Other perks, like step-by-step guidance throughout the refinancing process
To refinance or not to refinance
Whether you should refinance your auto loan depends on a myriad of factors including:
- Your credit score improved: If you’ve improved your credit score since you took out your current auto loan, you may qualify for a better financing deal.
- You want to change the loan term: If your financial situation has changed and you can pay off your loan sooner, or if you need smaller monthly payments.
- Loan rates are lower now: If auto loan rates have dropped since you took out the loan, you may qualify for a lower APR.
For the full list of reasons to refinance, click here.
How to avoid common refinance pitfalls
Whether you should refinance your auto loan depends on a myriad of factors including:
- Look out for lenders that reduce your car payments by extending the length of your loan instead of offering a lower rate.
- Get multiple quotes via CarEdge so you can compare loan offers to find a loan with the best terms that fit your financial goals and budget.
Frequently asked questions
What does it mean to refinance a car?
When does it make sense to refinance?
How much money can I save by refinancing?
The amount you can save by refinancing depends on several factors, including your loan balance, the difference in interest rates (APR), and the remaining loan term. By securing a lower APR, you can reduce the total interest paid over the life of the loan, resulting in substantial savings.
For example, let’s say you have a car loan with a balance of $25,000 at an APR of 7% for 60 months. Over the life of the loan, you’ll pay approximately $4,690 in interest.
If you refinance that loan to a 4% APR, your total interest would drop to around $2,624. That’s a savings of $2,066 over the remaining term.
A larger loan amount results in higher savings. For example, if the loan balance were $45,000 with the same interest rates and terms, refinancing from 7% to 4% would save you around $3,720 in interest. The higher the loan balance, the more substantial the savings when you secure a lower interest rate.
Use our free auto loan calculator to see exactly how much you’ll save.
When can I refinance a car loan?
In many cases, you can refinance almost immediately after taking out the original loan, no matter what the dealership Finance Office told you. It’s common to be told that you must wait, but that’s to protect their financial incentives from selling you the loan. If you are aiming to improve your credit score, it may be wise to wait at least three to six months. This gives you time to build a payment history, improve your credit score, and take advantage of better interest rates. In the meantime, check with your current lender to see if there are any prepayment penalties that could impact your decision. Most loans do not have prepayment penalties.
How much does it cost to refinance a car loan?
How can I get started with refinancing my car loan?
First, review your current loan terms. Take note of the bank, interest rate (APR), loan term, and payoff balance. This is also the time to check your most recent credit score.
Shop around for better rates. Reach out to multiple lenders, such as credit unions, banks, or CarEdge, to get quotes. Compare interest rates, loan terms, and the fees associated with refinancing to find the best offer for you.
Submit an application. Once you’ve found the best deal that you qualify for, it’s time to submit an application. Be prepared to provide documentation such as current loan information, proof of income, your details about your vehicle (such as year, make, model, and mileage).