Looking to refinance your auto loan to save money on payments? Compare our list of the leading auto refinancing marketplaces and direct lenders of 2021, ranked by past customer feedback, average monthly savings, ease of application process, time in business, and industry accreditations.
Last Updated: October 14, 2021
2021 Best Auto Refinance Services in America
Have you been wondering whether refinancing is the right option for you? After negotiating the best price on a vehicle, consumers are sometimes left with loans that have unfavorable terms and high interest rates. If that’s you, it may be time to learn how to find an auto refinancing company that’s right for you.
Even if you’ve decided that refinancing is worth exploring, you may not be familiar with the steps involved. In this guide, you’ll learn more about your auto refinancing options and how the process works. You’ll also discover practical tips for going into the process more prepared and knowledgeable.
Choosing the best auto refinancing company is a matter of personal choice. Having the most current information and comparisons available can make a world of difference to your financial outcome.
Auto loan refinancing is the process of taking out a new car loan to pay off the balance of an existing car loan.
Refinancing an existing car loan is helpful for customers who want to:
Refinancing is also beneficial when the buyer won’t be penalized for paying off a current loan early. Occasionally, financial institutions have early repayment fees and penalties. In this case, the benefits of the refinancing agreement should outweigh the consequences of ending the previous loan.
Many different types of auto refinancing options exist. These can include:
The type of refinancing offer you are eligible largely depends on credit history and your personal situation.
Auto refinancing works by replacing an existing car loan with a new one. Sometimes, buyers feel trapped in the original loan that they received through a car dealership at the time of purchase. When the interest rate is high or the terms are not favorable, customers may want to refinance at a later date.
The general refinancing process follows a simple format. This includes:
Auto loan refinancing can be more simple and straightforward than the process to refinance a house. While it still signifies a major financial decision, the principal amount of each loan is often substantially less. This results in a faster and more efficient process that can usually be accomplished online.
Before you refinance your vehicle, it’s important to take a few proactive steps. Refinancing is not the only viable financial option, nor is it the best for every situation.
Before you jump head first into refinancing, take these proactive measures:
If you’re still not sure whether refinancing is the best route for you, try using an auto loan refinancing calculator. These tools allow you to plug in personal and specific financial information to help you weigh costs and benefits. A calculator can also help you visualize how a lower interest rate could affect your personal monthly payments.
As you compare auto loan refinancing companies, it’s wise to get both a high level view of the company and an in-depth look at financial benefits. Choosing the best auto refinancing company is less about preference and more about specific information or terms that set one company apart from the next.
Here are a few characteristics of top auto loan refinancing companies:
Refinancing an existing auto loan can offer many positives. For the right borrowers, refinancing can provide peace of mind and greater financial security. Several advantages are listed below.
While refinancing might open the door for better financial options, it’s not always the solution. There are a few disadvantages to auto loan refinancings that borrowers should know before proceeding. These disadvantages are listed below.
The Credit Review offers a wide library of resources to help borrowers and customers learn about different types of personal loans. In Everything You Need to Know about Loans, you’ll start with the basics and discover how to compare loan products.
Whether you have poor credit and still need options, or if you’re looking to use the loan process to build your credit score from scratch, The Credit Review has the resources to equip and enable you to make the best decisions possible.
Typically, borrowers can refinance a current loan after some time has passed after purchasing a car. You may be eligible to to refinance when you can meet the requirements of a new loan and when the benefits outweigh the cost.
To compare refinancing rates, you can go directly to a lender’s website and start researching. Be mindful that lenders often advertise their lowest possible rates, which are usually reserved for individuals with excellent credit. Sources like The Credit Review can provide comprehensive, third-party reviews that help you see companies side by side.
Some refinancing companies work with borrowers who have scores as low as 500. However, that’s often the lowest score a borrower can have to be considered. If you have a very low credit score, it may be best to improve it in other ways before taking out new loans.
While there are many reputable auto loan and refinancing companies, there are also several scams that consumers should be aware of. Look out for loan companies that make bold guarantees, require a long list of fees, or make modifications to loans after the terms are set. To avoid falling for a scam, check out customer testimonials or reviews from the Better Business Bureau.
If you get declined during the refinancing process, the most important thing to do is stay calm. Continue making your traditional loan payments on time. Use the additional window of time to research options and explore which factors may have led to not being approved.
