Best Auto Loan Refinancing Lenders of 2020
Updated: Dec 16, 2020
NerdWallet released a list of the 10 Best Auto Loan Refinancing Lenders of July 2020. Subsequently, NerdWallet changed the title of the article from July to August to September all the way to November. The content of the article didn't change at all though. Money.com has an article about The Best Auto Refinance Companies of 2020. So does LendingTree, Investopedia and The Balance.
These lists unfortunately are missing a number of auto loan refinance companies worth mentioning. Moreover, the lists confuse Lenders, Refinance Brokers and Affiliate Websites.
You can find below an exhaustive list of all the companies that help with:
auto loan refinancing ,
adjusting loan terms,
lower interest rates,
or lease buyouts.
We will explain in depth how each of these companies work and what you as a consumer should do to find competitive auto finance rates, lower your auto loan payment and put thousands of dollars in your savings account. If you're looking for the best auto loan rates, you came to the right place!
Table of contents
Who qualifies for refinancing?
100,000,000 Americans have a car loan and more than 20% of car owners are overpaying on their auto loan rate. In 2019, more than 47% of all funded mortgage applications were refinancings. Meanwhile, barely 5% of all funded auto loans were refinances.
On the one hand, Americans simply don’t know that they can refinance their auto loans and save thousands of dollars to get the most out of their monthly income.
On the other hand, the process of refinancing your used car loan with any of the companies below is far from fast and easy: the process is usually inconvenient, requires a handful of phone calls and emails and you only find out what your total savings are once you’ve gone through the cumbersome process.
In sum, everyone with an existing loan will qualify for refinancing and lower monthly payments at some point in time. You don't have to wait for lower rates to refinance. Instead, make your payments in full and on time to migrate your credit score and qualify for a lower APR (annual percentage rate), already a few months after you bought your vehicle.
Caste study based on real clients
Refinance seems like one of these opportunities that feels attractive for others but not yourself. The following examples will demonstrate how anyone with a car loan can save thousands of dollars:
The table above shows an extract of our recently refinanced auto loans. You can see that we are helping car owners save thousands of dollars through refinancing many different lenders, a range of different credit scores and highly varying loan balances. The challenge is: how can you get a firm refinance offer easily, reliably and 100% online?
WithClutch.com is the only digital platform that allows you to refinance your loan easily, quickly and hassle-free from the comfort of your home. Thanks to our network of lenders, we are your one-stop-shop with the lowest rates and payments. Get an online preapproval now.
Auto refinance calculator
We built a calculator that estimates your monthly payments after a successful refinance. The auto loan refinance calculator gives you two options:
Pick your Year / Make / Model and estimate your monthly payments for your exact vehicle model year (i.e. your trim, drivetrain, engine, mileage, down payment and credit score).
Enter your Credit Score and existing loan balance to estimate your monthly payments for any loan term so you can optimize the original loan based on your budget.
The following chart shows an example of a $30,800 loan refinanced after 2.5 years:
After the refinancing, the calculator shows that the monthly payments went down from $733 to $375 on your new auto loan. The gray line is the vehicle value, the purple line is the first loan and the pink line is the refinanced loan. The yellow bar shows how the principal is being paid off over time and the red bar show the interest payment.
Better even than the estimates from our refinance auto loan calculator would be to enter your exact and accurate data in our digital refinance platform. All we need to determine eligibility for refinance is your phone number, your consent and three simple clicks and we provide you a firm credit offer in less than 2 minutes.
We can conveniently pull up your personal details, your credit file with your existing loans and your motor vehicle records. Through matching your credit file to the vehicles registered in your name, we can get you a much more accurate offer than any calculator estimate.
We won't store your data or impact your credit so there's nothing to worry about.
Which is the best lender to refinance with?
It’s important to understand the differences between the business models of the companies below:
Lenders: Banks and Credit Unions who ultimately replace your original loan with a new one with a lower rate (both for a new car or a used car). These institutions are in the business of lending money and these are the companies you pay your monthly car payments to. They won't help you compare rates or refinance with the same lender, they want new business!
Refinance Brokers: Companies that create a marketplace between lenders and you as the customer. These institutions are not the actual lenders but help you as a consumer figure out who the best lender for your loan would be. That said, once they have you on the phone, these companies make more money off you by charging a refinance or doc fee, by selling you GAP insurance and by selling you extended protection products.
Affiliate Websites: Websites that rank high in Google's search algorithm aiming to get you to submit your contact details. These companies make money by selling your contact details to either Refinance Brokers or Lenders. Once they have your contact details, be prepared for a whirlwind of emails, text messages and phone calls from people you've never heard about.
Comparison of the best auto loan refinancing websites
In their list of the 10 Best Auto Loan Refinancing Lenders, NerdWallet compares the companies on the following dimensions:
Min. Credit Score
Pros & Cons
Lenders who offer used auto loan refinancing don't usually differ too much on those dimensions: money is a commodity and therefore, the competing lenders' offerings and competitive rates are nearly identical. Moreover, they all focus on similar model years and have the same minimum loan amounts.
The better comparison would be the degree to which the auto loan refinancing websites are able to refinance you 100% online and from the comfort of your home:
None of the below companies created a 100% digital, end-to-end process that allows you to refinance your loan online. All of the firms require multiple phone calls, emails and text messages and will need up to a week and more to get you into a new / better loan. Nevertheless, let's describe each of them in more detail:
Lenders for car loan refinance
In reality, most lenders who provide auto loans will also offer auto loan refinancing. Your bank or Credit Union wants to satisfy as many of your banking needs as possible. If you have multiple auto loans with different auto loan companies, your lender would be very interested in refinancing the auto loan you currently have with a different lender.
Your bank or Credit Union, however, won't offer you refinancing for the auto loans you have with that very lender. Refinancing basically transfers profits from the lender into the consumer's pocket and therefore, your bank or Credit Union won't be very keen to refinance you with the same lender or helping you on that front.
The following lenders are worth mentioning in the context of auto loan refinancing because all of them have either made inroads into or are putting significant marketing dollars behind their refinancing efforts:
CapitalOne is the leader in data-driven decision making and auto lending. You can apply for a loan online, choose from different loan terms and make loan payments online. Just with any auto lender, you won't get a lower rate if you make payments over the life of the loan. The only way to lower your payments is to refinance. Find CapitalOne's refinance program at https://www.capitalone.com/auto-financing/refinance.
Bank of America was originally called Bank of Italy, founded in San Francisco. By 1945, Bank of America had grown to the world's biggest retail bank. As with all the big commercial banks, Bank of America offers car loans, primarily for prime credit borrowers. Find Bank of America's refinance program at https://www.bankofamerica.com/auto-loans/auto-refinance-calculator.
US Bank is a full service bank offering almost all banking products through its 3,106 branches and 4,842 ATMs and a decent size auto loan business. As a commercial bank, US Bank can only really serve near prime and prime credit borrowers. Find US Bank's refinance program at https://www.usbank.com/loans-credit-lines/auto-loans/auto-loan-refinancing.html.
Pittsburgh National Corporation and Provident National Corporation joined forced and formed PNC Bank. The auto loan business of PNC Bank is relatively small and won't offer competitive rates in any credit segment. Find PNC Bank's refinance program at https://www.pnc.com/en/personal-banking/borrowing/auto-loans/refinancing-an-auto-loan.html.
Mission Fed is San Diego's largest credit union. They offer very attractive rates to members with exceptional credit but sadly only serve the San Diego County. Find Mission Fed's refinance program at https://www.missionfed.com/Refinance-Auto-Loan.
Digital Federal Credit Union (DCU) is based in Massachusetts and likely one of the most progressive Credit Unions. DCU even invested in FinTech startups to bring banking online while offering very competitive rates. Find DCU's refinance program at https://www.dcu.org/borrow/vehicle-loans/auto-refinance-loans.html.
The United Services Automobile Association (USAA) has 13 million members and leads in customer loyalty. Rates are ok while most of the processes are still heavily reliant on USAA's retail branches. Find USAA's refinance program at https://www.usaa.com/inet/wc/bank-car-refinance.
PSECU's members include more groups than state employees. They have 450,000 members and offer really attractive rates to membre with excellent credit, primarily through their branches. Find PSECU's refinance program at https://www.psecu.com/loans/auto-loans/refinance.
EECU is a Texas based Credit Union with 225,000 members. Rates are low but only accessible to members who live in the Fort Worth area and with excellent credit. Find EECU's refinance program at https://www.eecu.org/personal-banking/auto/products/auto-loan-refinance.
Wells Fargo is the world's fourth-largest bank by market capitalization headquartered in San Francisco. WellsFargo's auto loan program is fairly large and focused on near prime and prime borrowers, with moderate to decent rates. Find WellsFargo's refinance program at https://www.wellsfargo.com/auto-loans/?linkLoc=hb.
Patelco Credit Union originally served AT&T. The Credit Union its headquartered in Dublin, near Silicon Valley and is relatively advanced with technology. Rates are competitive but Patelco usually only works with Franchise Dealers and with borrowers in the prime credit segment who get a car on finance. Find Patelco's refinance program at https://www.patelco.org/explore-services/auto-loans.
OneMain Financial's provides credit and insurance Americans with limited access to traditional banks and challenged credit. Rates are high but for Americans in the subprime Credit Segment, OneMain Financial can be a good partner. Find OneMain Financial's refinance program at https://www.onemainfinancial.com/personal-loans/auto-refinance.
Fifth Third Bank has 1,154 branches and is very focused on the offline banking business. Like any other commercial bank, rates are moderate but only accessible to Americans with near prime to prime credit. Find Fifth Third Bank's refinance program at https://www.53.com/content/fifth-third/en/personal-banking/borrowing-basics/auto-loans.html.
Chase operates more than 5,000 branches and 16,000 ATMs, which makes Chase Bank one of the largest retail bank operations in the U.S. Chase also gives a lot of auto loans, mainly to its customers with decent to great great. Rates aren't impressive. Find Chase Bank's refinance program at https://autofinance.chase.com/auto-finance/auto-refinance.
LendingClub started as a digital, peer to peer lending platform and was celebrated as one of the first successful FinTech lending business. The process starts with an online application, LendingClub will then pull your credit report and provide several loan offers. Unfortunately, LendingClub tried to do too many things at once, was never successful in providing competitive auto loan rates and the share price lost ~80% of its value. Find LendingClub's refinance program at https://www.lendingclub.com/loans/auto-refinancing.
LightStream is one of the online lenders and subsidiary of SunTrust bank and focused on people with excellent credit and a long credit history. The application process is 100% online. Like with any other lender, there are no prepayment penalties. Loans from LightStream are usually consumer loans (i.e. a different loan type than a secured auto loan) and don't require a lien on the vehicle title. Therefore, the process is quick and simple, unusual for a financial institution in the auto loan space. Find LightStream's refinance program at https://www.lightstream.com/auto-refinance and SunTrust's refinance program at https://www.suntrust.com/loans/auto-loans-financing/refinance-auto-loans.
Consumer CU is a progressive Credit Union offering auto refinance loans as well as new car loans. They offer shorter and longer terms and are focused on the segment of the population with good credit. Credit Unions are the right auto loan companies to work with if your loan is currently with a commercial bank and you're looking for a new lender. As with most Credit Unions, the loan applications is not optimized for a 100% online process. Find Consumer CU's refinance program at https://www.consumerscu.org/personal/lending/auto-loans-2.
NavyFederal is one of the biggest Credit Unions in the US. They're offering personal loans, credit cards, auto loans for used and new vehicles and any other lending product. Credit Unions usually offer the best apr loans but are only an option for people with excellent credit and no repayment challenges. The downside of Credit Unions is that they are not tech savvy and the process to get to a better rate is usually inconvenient. Find Navy Federal's refinance program at https://www.navyfederal.org/loans-cards/auto-loans/auto-refinance-rates.php and we recommend you check for rate discounts should you set up autopay.
Just like Navy Federal, PedFed is a Credit Union and focused on people with very high Fico scores. PenFed's product offering ranges from credit cards to personal loans and used vehicle loans. PenFed offers great rates and has the biggest refinance ambitions of any Credit Union. The refinance brokers described below are PenFed's biggest channel for new members who already have a car loan and want to lower their rate and payments. Find PenFed's refinance program at https://www.penfed.org/auto/refinance.
Refinance Brokers for car loan refinance
Auto loan refinance brokers like the ones listed below come and go. They make money through origination fees / loan referral fees, refinance fees and through up-selling GAP insurance and other protection products.
The current batch of Auto Refinance Brokers worth mentioning include:
AutoApprove is an auto loan refinancing company based in Minnesota. "Getting a quote takes a few minutes [and our] personable loan consultants find you the best lender, and once approved handle the rest." As the description suggests, a customer service employee of AutoApprove will walk you through the refinancing process. You won't be able to refinance 100% online.
Like a number of the auto auto loan refinance brokers, Autopay is headquartered in Denver. Autopay's product offering ranged from refinance to lease buyouts. Among the auto refinance brokers, Autopay is the most technologically advanced business offering API integrations for a number of use-cases.
In 2017, Ally Financial purchased the refinancing company Clearlane, "an online marketplace called Clearlane, that connects consumers with leading auto finance providers to finance or refinance their vehicles with ease." Partnering with Ally Financial, Clearlane should be able to offer a variety of loan terms and rates for a wide Fico credit spectrum. Clearlane works exclusively with Ally Financial's loan products and therefore can't compete with the low Credit Union rates for borrowers with exceptional credit.
Gravity Lending is yet another call-center based auto refinance broker from Austin, Texas. Gravity Lending advertises to be a fintech company with over 50 years of financial services experience, which seems confusing given that the Internet is barely 25 years old. Similar to the other auto loan companies, Gravity Lending connects car owners with lenders that offer the best rates, terms, and conditions.
iLendingDirect is a Colorado based, privately owned company with a very experienced executive team. The business started with providing financing for lease buyouts. Over the last couple of years, iLendingDirect stopped financing lease buyouts and transitioned their offering to helping customers refinance their existing auto loans. iLendingDirect charges a $499 processing fee for finding you the best available rate.
MotoRefi is a Venture funded startup based in D.C. The company was incubated by the FinTech focused Venture Capital firm QED. Think of MotoRefi as a matchmaker between customers who want to refinance their auto loan and lenders. 80% of Motorefi's customers end up getting a loan with PenFed. In fact, PenFed wanted to invest in Motorefi. Based on customers reviews, a customer who is trying to refinance his/her auto loan through MotoRefi ends up having a number of phone calls. Moreover, Motorefi charges a $399 refinancing fee. We wrote a thorough review on MotoRefi and conclude it charges fees and only creates savings for those borrowers who qualify.
OpenRoad Lending was started in 2009 and offers refinancing, vehicle service contracts and GAP insurance. Based on customer experiences, OpenRoad Lending serves a wide range of Fico scores. The process is primarily phone and email based.
RateGenius is a Private Equity owned company out of Texas. On a good month, RateGenius helps approx. 2,000 customers refinance their auto loans. Just like the other auto refinance brokers, RateGenius is a matchmaker between customers and lenders. While RateGenius has a network of more than 100 lenders, most of their loans in fact go to around 20 different Credit Unions and banks. Through selling GAP insurance and extended service plans, RateGenius makes approx. $1,200 in profit per customer. $125 of the profit, RateGenius generates through charging a RateGenius fee. We wrote a thorough review on RateGenius and uncovered hidden fees yet good savings for those borrowers who qualify.
Tresl (formerly known as Innovate Funding Solutions or IFS) is a Texas based auto loan refinancing companies also offering lease buyout and company car purchase loans. Similar to the other auto loan refinance brokers, Tresl charges a refinance fee, sells protection plans and GAP insurance to increase the margin on every based on customer reviews.