If your credit has improved or rates have dropped since you bought your car, refinancing can shrink your payment. In the first quarter of 2026, drivers who refinanced cut their interest rate by about 2.24% on average, and credit union borrowers saved around $101 a month. That adds up fast.
The catch is that the "best" place to refinance is not the same for everyone. The right pick depends on your credit, your current lender, and how much shopping you want to do. Below are our top picks and how to choose, with rates as of June 2026.
How Auto Refinancing Works
Refinancing replaces your current car loan with a new one, ideally at a lower rate or a better term. The new lender pays off your old loan, and you start making payments to them instead, with the car still serving as collateral on the new loan.
You generally want refinancing if your credit score has gone up, market rates have fallen, or you want to change your monthly payment. It is a good fit when the savings outweigh any fees.
Our Top Picks
There is no single winner for every driver. Here are strong options across the main categories, plus who each one fits best.
Best for Hands-Off Shopping: myAutoloan
myAutoloan is a marketplace that lets you get up to four lender matches with a single soft credit check, so comparing offers does not ding your score. As of June 2026, its lowest advertised refinance rate is around 4.20%. It is a solid starting point if you want to see several offers quickly without applying to each lender one by one.
myAutoloan
myAutoloan
Find the right auto loan in minutes — even with bad credit. myAutoloan connects you with 20+ lenders to compare personalized offers for new cars, used cars, refinancing, and lease buyouts. Free to use with no obligation.
Standout feature
Compare offers from 20+ lenders. Works with bad credit. BBB A+ rated.
Fees
Free
Pros
Free to use with no obligation. Works with all credit types including bad credit. BBB A+ accredited.
Cons
Some users report receiving calls from multiple dealers after applying.
Best for Comparing Many Lenders: A Loan Marketplace
Marketplaces shine when you want competition for your business. MoneyLion runs a marketplace that can surface auto and personal loan offers from multiple partners, often with a soft pull first. LendingTree is another well-known marketplace that can match you with up to five lenders in minutes. Marketplaces are the easiest way to make lenders compete without filling out a dozen separate applications.
MoneyLion
MoneyLion
Compare personal loan offers from top providers in minutes with no credit score impact with the MoneyLion Marketplace.
Standout feature
Soft-pull marketplace that surfaces prequalified personal loan offers from a network of lenders, with options up to $100,000 and partners that work with fair and bad credit
Fees
Free to use the marketplace
Pros
Compare multiple lender offers in minutes; soft credit pull to prequalify — no impact on your score
Cons
Final approval requires a hard pull from the chosen lender
Best for Low Rates if You Qualify: Credit Unions
Credit unions led on savings in early 2026. PenFed, for example, advertised refinance rates as low as 4.19% APR on a 36-month new-car loan and 4.79% on a used car with higher mileage, with easy membership (open a savings account with a $5 deposit). Credit unions often beat banks, but you usually must join first.
Best for Refinance-Only Focus: Specialized Platforms
Some platforms do nothing but refinancing. Caribou specializes purely in auto refinance, while Autopay shops your loan across more than 220 banks and credit unions. These are worth a look if you want a service built around refinancing rather than new-car buying.
Best for Existing Customers: Your Own Bank
Do not overlook the bank or credit union where you already keep your money. Existing customers sometimes get relationship discounts, and you may get faster approval since they already have your information. Always compare their offer against at least one marketplace quote.
How to Choose the Right One
With so many options, a simple approach is to gather a few quotes and compare apples to apples. Look beyond the rate alone.
When comparing offers, check:
- APR, not just the monthly payment. A lower payment can hide a longer term.
- Loan term. Stretching the term lowers the payment but can raise total interest.
- Fees, including any title or origination fees on the new loan.
- Prepayment penalty on your current loan. Some lenders charge a fee for paying off early, which can eat into savings.
Applying to several lenders within a short window and comparing offers gives you the best shot at the lowest rate for the shortest term you can afford.
Watch Out for Negative Equity
Before you apply, find out whether you owe more than your car is worth. This is called being underwater or having negative equity, and it can block a refinance.
It is a real problem right now. In the first quarter of 2026, Edmunds found that 30.9% of new-vehicle trade-ins carried negative equity, with the average underwater amount hitting $7,183, a record for a first quarter.
If you owe more than the car is worth, many lenders will not refinance, or they will ask you to put cash down to reach a healthier loan-to-value ratio. Check your payoff balance against your car's market value before you shop.
Steps to Refinance Your Car
Ready to move forward? The process is usually quick if you have your documents ready.
- Check your credit score for an auto loan and your current loan payoff amount.
- Estimate your car's value to gauge your equity.
- Get quotes from a marketplace and a credit union for comparison.
- Compare APR, term, and fees side by side.
- Pick the best offer, finalize the loan, and confirm your old loan is paid off.
While you are at it, keeping an eye on your credit can help you lock in a better rate. A monitoring tool like Creditship.ai lets you track your score and the factors behind it.
Creditship
Creditship
Get free credit monitoring and concrete advice how to improve your credit from Creditship AI.
Standout feature
AI Credit Coach. AI analyzes your credit report in depth and gives you tailored, actionable steps to raise your score.
Fees
Free
Pros
Free credit report access plus monitoring and alerts
Cons
No credit repair feature
These are tools and starting points, not a recommendation of any single lender. APRs vary by creditworthiness, and terms and conditions apply.
What Users Commonly Report
Drivers who refinanced often say the biggest win was a lower monthly payment, especially those who came from a high-rate dealer loan. Many were pleased that soft-pull prequalification let them compare without hurting their credit.
The most common complaint is hidden costs: a prepayment penalty on the old loan or a longer term that raised total interest even though the monthly payment dropped. Some were turned down because they were underwater on the car. A frequent lesson is to compare the total cost over the life of the loan, not just the new payment.
Frequently Asked Questions
What is the best place to refinance a car loan?
There is no single best place for everyone. Credit unions often have the lowest rates if you can join, while marketplaces like myAutoloan and MoneyLion make it easy to compare several offers at once. The best choice depends on your credit and how much shopping you want to do.
Does refinancing a car hurt your credit?
It can cause a small, temporary dip from the hard inquiry when you formally apply. Many lenders and marketplaces let you prequalify with a soft pull first, which does not affect your score. The long-term effect is usually minor.
How soon can you refinance a car after buying it?
Many lenders let you refinance after about 60 to 90 days, once the title has transferred. Waiting until your credit improves or rates drop can help you qualify for a better deal. Check each lender's specific waiting period.
Can you refinance a car with negative equity?
It is harder. If you owe more than the car is worth, many lenders will decline or ask for cash down to reach a healthier loan-to-value ratio. Compare your payoff balance to your car's value before applying.
This article is for general information only and is not financial advice. Rates and terms vary by lender and by your situation. APRs vary by creditworthiness, and terms and conditions apply.
