Best banks to refinance cars
Are the conditions of your car loan not the best? Are your monthly car payments taking a big chunk out of your income?
Probably, making a loan change could help you, so today we will tell you which are the best banks to refinance cars in the USA.
We’ll also tell you when you should refinance your car and how to do it.
Can a car be refinanced in the United States?
Yes, in the United States there are banks that refinance cars. So if you’re not happy with your current loan, you can apply for new auto financing with a different interest rate and new terms.
You can find refinancing for your car at banks, Credit Unions ( Credit Union , in English) and other financial institutions.
However, the requirements and conditions will not be the same. In fact, in some cases, they might not be convenient for you. Hence the importance of looking for the best refinancing options.
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What are the best banks to refinance cars?
The best banks to refinance cars are those that offer competitive rates and low minimum loan amounts , plus their credit score requirements and payment terms should be flexible.
Remember that when looking for an auto refinance, it is advisable to use lenders that have a good track record of customer satisfaction and that their application process is simple.
The best banks to refinance cars in the USA
Below, you will find a list of those that we have considered as the best banks to refinance cars in the USA.
Remember that before making your choice you must analyze your particular situation and your needs.
Best Car Refinance Loans
These are some of the financial entities that can offer you good conditions for car refinancing in the United States.
- OpenRoad Lending: Better Refinance Rates
- Bank of America: Best bank to refinance a car
- PenFed Credit Union: Best Credit Union to Refinance Cars
- LightStream: Best Car Refinance Online
Open Road Lending
OpenRoad Lending specializes in auto refinancing. Offers traditional and cash-back refinancing options.
Their range of loan terms is quite wide, meaning borrowers with excellent credit can get vehicle refinancing at very low rates.
Conditions and requirements
APR: They say it is very low, you must apply to see them
Minimum loan amount: $7,500 in most states
Return terms: Up to 72 months
Recommended Credit Score: Undisclosed
Availability: Nationwide
Description
Founded in 2009, OpenRoad Lending specializes in auto refinance loans and offers a variety of auto-related financing products.
Their refinancing rates are low, but you must apply to see them. OpenRoad Lending says that their clients tend to save $100 per month or more with their new payments.
Its traditional refinancing service is open to borrowers with different credit scores. There is also a cash-back refinance option, which allows borrowers to get cash when refinancing a vehicle.
To refinance a car with OpenRoad Lending, you must do so for a minimum of $7,500 and a maximum of $100,000.
The car must be at least 8 years old and have less than 140,000 miles. In addition, you must have a monthly gross income of at least $1,500 and cannot be self-employed.
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IMPORTANT: OpenRoad will not refinance discontinued vehicles, commercial vehicles, recreational vehicles or motorcycles.
You can apply for a loan with this company through their online application or by phone.
Why do we consider OpenRoad Lending a good option to refinance a car?
OpenRoad Lending offers auto refinance loans at fairly low rates. They do not disclose their full range of interest rates, however, qualified borrowers can receive very competitive rate quotes.
Bank of America
Compared to other large banks, Bank of America offers more affordable refinancing rates and an easier application process.
It is available nationwide and has earned good ratings for consumer financial satisfaction.
Conditions and requirements
- APR Range: 3.29% APR
- Minimum loan amount: $7,500 to purchase ($8,000 in Minnesota)
- Return terms: 12 to 75 months
- Recommended Credit Score: Undisclosed
- Availability: in the 50 states of the USA
Description
Bank of America (BOFA) is one of the best banks to refinance cars. Borrowers can refinance any auto loan, whether the original loan was obtained through BOFA or another institution.
Rates to refinance a car start at 3.29% and those on the bank’s Preferred Rewards can get up to 0.5% off their rate.
The main disadvantage of obtaining an auto loan through Bank of America is its restrictions on the type of vehicle.
Does not make loans for cars over 10 years old, vehicles with 125,000 miles or more, or vehicles worth less than $6,000. It also will not provide loans of less than $7,500 ($8,000 in Minnesota).
Interested parties can apply for refinancing online, and according to the bank itself, the application process will take no more than 60 seconds.
The online application allows terms of 48, 60 and 72 months, but you will have more options if you apply at a branch or by phone.
Once the refinance is approved, the payment is sent directly to the loan holder.
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Why do we consider Bank of America a good option to refinance a car
Bank of America is a good option if you want to refinance your car loan at a large bank. This lender features multiple refinancing options and a simple online application process.
PenFed Credit Union
PenFed members get access to very competitive refinancing rates with an average monthly savings of $108 per month.
The online application process at this entity is simple and borrowers can finance up to 100% of their vehicle.
Conditions and requirements
- APR Range: 1.79% APR
- Minimum loan amount: $500
- Return terms: 36 to 84 months
- Recommended Credit Score: Undisclosed
- Availability: All 50 States
Description
PenFed offers a wide range of loan terms and very competitive rates to its members. Refinance rates for 2020 or newer vehicles start at 1.79% for 36-month loans and amounts from $500 to $100,000.
Rates and minimum loan amounts at PenFed increase as the refinancing term increases.
For example, an 84-month refinance loan for a 2020 or newer car includes a rate starting at 4.49%, versus 1.79% for a 36-month loan.
As with most lenders, borrowers must have excellent credit to get the lowest rates.
Remember that you must be a member of the credit union in order to refinance a car loan. You must also open a savings/stock account with at least $5.
Why do we consider PenFed a good option to apply for an auto refinance?
PenFed Credit Union is a great option if you want to refinance your car through a credit union. This lender has wide availability and competitive rates.
LightStream
LightStream offers competitive rates, a wide range of vehicle refinance options, and an online application process. This lender has also earned strong marks for customer service.
Conditions and requirements
- APR Range: 2.49%* with auto pay and excellent credit
- Minimum loan amount: $5,000
- Return terms: 24 to 84 months*
- Recommended Credit Score: Undisclosed
- Availability: in the 50 states of the USA
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Description
LightStream, SunTrust Bank ‘s online lending division , offers users a completely online lending process. Borrowers can receive a direct deposit the same day they request it.
For those with excellent credit, LightStream offers some of the most competitive refinancing rates. With this lender there are no major restrictions on the type of vehicle to be refinanced.
LightStream rates start at 2.49% for 36-month loans from $10,000 to $24,999, with the option of automatic payment. If you do not opt for automatic payment, the quoted rates increase by 0.50%.
You can finance amounts between $5,000 and $100,000. Please note, however, that you will not be able to apply for a loan to finance another existing LightStream loan.
IMPORTANT: LightStream can immediately affect your credit upon application.
Why do we consider PenFed a good option to apply for an auto refinance?
If you’re looking to refinance online, LightStream is a great option. The application process is fast and you can get the money the same day.
In addition, LightStream rewards borrowers with good credit with low rates.
Should I refinance my car?
There are a few signs that it’s a good time to refinance your car. For example:
If interest rates have dropped. Refinancing to a lower rate can lower the overall interest costs of your loan.
If you want to reduce the monthly installments of your car. Getting a new loan can help you free up cash to pay bills and cover expenses.
If your credit score has gone up after buying a car. If your credit profile is better now than when you bought your car , you may be able to obtain better loan conditions through refinancing.
Refinancing your car loan can help you lower your monthly payments and the amount of interest you pay over the life of the loan. Now, only you can know if refinancing is the best decision.
First you must analyze your case, if you think that refinancing will improve your current situation, look for a lender that offers you good conditions and move on.
How to refinance a Car
Maybe you don’t know where to start and you wonder: What do I do to refinance my car? How to refinance my car? Don’t worry, we’ll tell you what to do, step by step.
The first thing to keep in mind is that each lender has their own requirements for refinancing auto loans. However, the steps to refinance a car are similar to the steps you took to take out your current loan.
Check your credit report. Fixing any errors on your credit report can help boost your credit score. Lenders largely determine the rate you pay based on your credit.
This means that any improvement in your credit will lead to lower rates and greater savings on your loan in the long run.
Gather documents and information about your current loan and your vehicle.
Compare refinance loans from various lenders.
You should include online lenders, large banks, credit unions, and community banks in your search. Any lender that has competitive rates and fees is worth considering.
Remember that credit inquiries within a 14-45 day period count as one inquiry on your credit report.
Choose a lender. Send the requested documents, wait for approval and sign your new contract.
How to compare banks that offer car refinancing?
For your auto refinance to be a success, it’s important to choose a bank that meets your needs. Some aspects to consider when evaluating banks that offer refinancing are the following:
- Rates: The lower the rates, the more you will save on interest. You should compare multiple lenders to secure the lowest rates possible.
- Required Credit Score – Some lenders have minimum credit score requirements.
- Vehicle Restrictions – While some banks and lenders refinance all vehicles, others have certain restrictions when it comes to car type, age, and mileage.
- Prequalifying Options: If possible, find a lender that will allow you to prequalify for a refinance without affecting your credit score.
- Application Process – Look for a lender that offers a simple application process and fast auto financing .
- Customer Service – Choose a lender that has a history of good service and high customer satisfaction.
Read also: How does auto financing work?
Does refinancing a car hurt my credit?
A hard credit application will always affect your credit initially. However, the three main credit agencies in the USA grant a period of 14 days for consumers to compare conditions and rates.
All credit inquiries within two weeks will not affect your credit more than a single inquiry.
How long do you have to wait to refinance a car?
There is no specific waiting time to refinance a car. However, some auto loans may have prepayment penalties or other fees if they are paid before a certain time or if financing is requested.
Check your loan agreement or ask your current lender if prepayment penalties apply to your loan.
How much does it cost to refinance a car loan?
Just as each auto lender has different criteria for refinancing an auto loan, they also have different refinancing rates.
Some auto lenders charge origination and processing fees to complete the refinancing process . In addition, you may have to pay a prepayment penalty from your original lender.
However, other lenders don’t charge any fees, so it’s a good idea to find out ahead of time.
