The 10 Best Auto Loan Refinancing Lenders With Bad Credit

Refinancing a car loan with bad credit was an impossible thing in the past. Thanks to the market dynamics, many lenders who can refinance auto loan with bad credit have emerged. Refinancing is ideal for a low-interest car loan or reduced monthly payments. While the application process for refinancing usually is not that complicated, getting the approval for an interest rate reduction or the lowest car refinance rates is often difficult.

The aforesaid occurs when you submit late payments, have experienced bankruptcy or overextended credit accounts. OpenRoad, Tresl, and LightStream are among the best auto refinance companies that offer some of the lowest refinance auto loan rates. Remember, each lender has a set minimum credit score requirement that, in many cases, is at 500 mark or above. Annual percentage rate (APR) also differs across lenders as well as the minimum to maximum amount lendable.

When To Refinance An Auto Loan

  • In case you come across lower interest rates: In the event when inquiring for the best lender who can refinance an auto loan with bad credit, you may stumble upon better rates than what you are currently servicing. Even a small difference can turn out to be more significant savings in the long run.
  • Suppose you want to pay lower monthly installments: In many cases, when caught up in a tight budget or the unexpected occurs, such as loss of employment or medical urgency, refinancing a car loan can help you get more affordable rates. In turn, you will be able to spare some cash that can enable you to cope with the situation.
  • When your credit score has improved: Suppose you realize the slightest improvement on your credit score since when you first took out your car loan, you can consider refinancing even if the development does not necessarily pull you out of the list of bad credit.
  • You want to add or remove a cosigner: Having a cosigner with a good credit standing will help lower your rate of payment. You may also want to remove a cosigner whom you needed at first to get your first auto loan.
  • Upon realizing you did not get the best deal: When you are paying a much higher interest compared to other auto loans, remember that many dealers offer car loans at high-interest rates than other auto finance options available.

How Does Bad Credit Affect Auto Loan Refinancing

Refinancing an auto loan with bad credit history is usually not easy; however, it is conceivable. It is a suitable option to consider most, especially when there is an improvement in your credit score or when the rates have gone down. Remember that your credit score decreases depending on your loan commitments. If you are compliant i.e., you are making timely payments; then, it will eventually increase. Defaulting or late loan payments, a notice of bankruptcy, or overextended credit accounts may significantly reduce your score and hinder any possibilities for a refinance approval. Some credit scoring models check the average age of your loan accounts to determine your score. As such, if you have taken longer than required to repay a loan, it will land you on a bad rating. With that information, some companies may not approve your loan while others will. A bad credit

How To Qualify For Refinancing An Auto Loan

Refinancing an auto loan is a great option when your credit score has increased since you took the initial loan. The terms will be favorable, and you will be able to save money and possibly remove the cosigner. Below are things to look out for to qualify for refinancing an auto loan.

  • Check your credit and confirm that there are not any errors in the credit report. You can check your credit score through your bank r card issuer at no fee. Credit scoring sites such as credit sesame r credit karma can come in handy as well. offers free credit checks once every year. Alternatively, you can buy your credit report at any given time from the major credit bureaus. Remember, the higher the credit score, the better the interest rates.
  • Get an estimate on your car loan to value ratio by looking at how much you still owe as loan repayments against your car’s estimated fair market value. You can use online tools like Kelley Blue Book or Edmunds to find your car fair market value. If what you owe is worth more than your vehicle’s value, then it will not be easy to qualify for an auto refinance loan. Else, you may choose to wait until such a time you have built up some equity. But if the car has a higher value than the loan balance, refinancing is considered more viable. 
  • Confirm with the lender if there is a prepayment penalty on your loan. A prepayment penalty is the fee charged by a lender if you pay off your loan earlier than the stipulated repayment period. It is a great way to boost your credit score and save you some cash.
  • Consider the remaining period for your outstanding auto loan before opting to refinance because it may prolong the repayment period. The extension lowers monthly payments. However, you might end up paying a lot more in the long run due to the extra money and interests you brought on board.
  • Gather the necessary documentation required by the lender. Documents entailing personal identification information, car details, income statements or slips, and loan history should be kept ready to be availed to the lender on request.
  • Look for the best deal by getting quotes from different lending companies. You can also check with the small local banks and credit unions. Multiple inquiries may appear on your credit report. However, that should not worry you because, more often than not, car loan lenders use a soft inquiry to generate a quote while waiting to do a hard inquiry the moment you apply for a loan.
  • Apply for a new loan once you have a refinancing deal that suits you. Upon approval, the lender settles the old loan, and you start making payments to your new lender. Your car title will be transferred to the new lender as well.

Requirements For Refinancing An Auto Loan

  1. Ensure you have a clean title for your vehicle: The car you intend to refinance should not be a commercial car, and it should be free of branded titles such as rebuilt or salvage.
  2. Avoid negative equity on the car: This occurs when the vehicle is worth less than the existing loan balance. To get a refinance on favorable terms, ensure that the car’s value is worth more than what you owe.
  3. Ensure that the new loan is within the lander’s guideline: It is essential to be sure that the balance to be refinanced falls within the financier’s lendable range.
  4. Up to date payments: Being current with payment is necessary as it demonstrates your commitment to the lender. Defaulting or delaying may result in disapproval of a loan or a high-interest charge.
  5. Ensure the car qualifies: Auto loan companies have their set minimums when it comes to your vehicle’s age and mileage. If the car is too old or has high mileage, there are chances of non-approval or higher interest rates for an auto loan refinance.

The 10 Best Auto Loan Refinancing Lenders With Bad Credit

When considering to refinance an auto loan with bad credit, many lenders come to mind. To make the process quick and easy, you require a history between 6 to 12 months of timely payments. Other factors may include credit score and history. Below are the best lenders available in the market who can refinance an auto loan with bad credit.

1. OpenRoad

The lender has been around since 2009, offering loan terms for all types of credits. Their services are available across 40 states. They lack presence in areas like Alaska, Hawaii, Minnesota, Mississippi, Montana, Nevada, New Hampshire, North Dakota, South Dakota, and Wisconsin. Social security number is a must during application for refinancing. Open Road Lending offers a rate quote without a hard credit pull. Though, its lending partners may use a hard pull. The vehicle model should be no more than ten years old and has covered less than 150,000 miles. Oldsmobile, Daewoo, Smart Car, or Isuzu are disqualified and therefore are not eligible for refinancing by the lender.

Key Features

  • APR: Between 3% to 18%
  • Loan Amount: Ranges between $10,000 to $100,000
  • Minimum Credit Score: 500
  • Minimum Income Requirement: $1500 per month

2. Tresl

Tresl is not a direct lender meaning that it offers loans through a network of lenders. The lender is best known for providing unmatched assistance to the borrower when it comes to paperwork. Upon applying for pre-qualification, you will receive offers from several lenders within minutes without a hard credit inquiry. For a vehicle to qualify, it must be the year 2011 model or newer. The mileage should read 150,000 miles or below. While you stand a chance to get funding with a credit score of 500, a better opportunity lies with a credit score of 550 and above. Those not employed or relying on unemployment benefits are not eligible.

Key Features

  • APR: Varies across lenders
  • Loan Amount: Varies across lenders
  • Minimum Credit Score: 500
  • Minimum Income Requirement: $1500 per month with a proof

3. LightStream

Apply for a refinancing fast and easy with Lightstream, an online lending platform of Sun Trust Bank. All vehicle models are eligible for refinancing, and the mileage coverage is not a set requirement. The lender offers services across all 50 states. There is no minimum monthly income requirement as they consider an applicant’s credit history, assets, savings, and other information that may indicate a good background of firm financial management.

Key Features

  • APR: Between 3.49% to 8.34%
  • Loan Amount: Ranges between $5,000 to $100,000
  • Minimum Credit Score: 660
  • Minimum Income Requirement: None

4. RefiJet

RefiJet is a online vehicle refinances company offers loans through a network of lender partners. It offers flexible payment terms and handles all the paperwork on for the borrower. It has no hard credit check with the application, and it is present across all the 50 states. Their loan term stretch between 36 to 96 months. The vehicle model must be ten years or below, with a mileage of 200,000 miles or less.

Key Features

  • APR: Between 2.45% to 17.99%
  • Loan Amount: Ranges between $7,500 to $150,000
  • Minimum Credit Score: 580
  • Minimum Income Requirement: $2000 per month for an individual and $2500 per month for joint accounts

5. LendingClub

To qualify for an auto refinance loan from LendingClub, you must be at least 18 years of age, a US citizen or a permanent resident or live in the US on a long-term visa. It is also among the requirements that you must reside from the 32 states where it operates. Namely, Alabama, Arkansas, Arizona, California, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, New Mexico, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington, and Wisconsin. For your vehicle to qualify it must be yours by ownership and below 120,000 miles reading for borrowers with a credit score above 630 while those with below, their vehicle mileage should be below 110, 000 miles.

Additional requirements are that the car should be of utmost ten years old from the date of manufacture and currently registered in your states. However, for borrowers whose credit score is below 630, the vehicle should be of utmost nine years old from the manufacture date. The registration expiry should not be due to expire within 30 days. All vehicles are eligible except Chevrolet Express G-Series van, Cross lander, Daewoo, Hummer, Isuzu, Mercury, Nissan leaf, Oldsmobile, Pontiac, Saab, Saturn, Suzuki, Diesel Volkswagen, ATV, RV, Motorcycles, Commercial vehicles, and Salvaged vehicles. For you to qualify, your previous loan must be at least three months old and remain 24 months or more for repayment. The loan balance should be between $5,000 and $55,000.

Key Features

  • APR: Between 3.99% to 24.99%
  • Loan Amount: Ranges between $5,000 to $55,000.
  • Minimum Credit Score: 510
  • Minimum Income Requirement: None

6. Autopay

Autopay is not a direct lender. It offers its services through a network of lenders spread across all 50 states. Therefore, the terms vary, which include the vehicle model or make. The maximum vehicle age is 11 years, and the maximum mileage is set at 125,000 miles. The loan repayment period ranges from 24 to 84 months.

Key Features

  • APR: Between 1.99% to 17.99%
  • Loan Amount: Ranges between $2,500 to $100,000
  • Minimum Credit Score: 600
  • Minimum Income Requirement: $2000 per month

7. RateGenius

Rate Genius finances loans through its network of partners who are present in all states across the US. Though they perform hard credit checks, they also deal with all the paperwork for the borrower. The vehicle should be a maximum of 7 years since the date of manufacture to qualify. It should also have covered a maximum of 100,000 miles. Their loan repayment terms range between 24 and 87 months.

Key Features

  • APR: Between 1.99% to 16%
  • Loan Amount: Ranges between $12,000 to $100,000
  • Minimum Credit Score: 550
  • Minimum Income Requirement: $2000 per month

8. Consumers Credit Union

Based in Illinois, Consumers Credit Union has nationwide coverage. Its loan’s annual premium rates come with an automatic payment discount. There is, however, a $29 late fee after a 10-day grace period for missed payments. Applications are done either online, through phone, or in-person in Illinois. The loans are approved or declined within 24 hours. You need to be a member to apply. To gain membership, you must pay a fee of $5 and open a savings account with a monthly minimum balance of $5.

No restrictions have been imposed; however, cars that are 2011 models or older are financed at higher, collateralized loan rates. Similarly, there is no maximum vehicle mileage requirement, although vehicles with over 100,000 miles are subject to more scrutiny. The loan terms range from 6 to 84 months.

Key Features

  • APR: Between 2.69% to 21.99%
  • Loan Amount: Ranges between $5,000 and $150,000
  • Minimum Credit Score: 620
  • Minimum Income Requirement: $200 per month for individuals and $3000 per month for joint accounts

9. Clearlane

Clearlane offers to refinance auto loans through Ally Direct Lending, which is not available in Nevada, Vermont, and Washington, DC. For your vehicle to qualify for refinancing, it needs to be under ten years since its manufacture. It should not have covered above 120,000 miles. The maximum loan to value ratio for the car should be at 155%. Clearlane offers loan terms of between 36 to 75 months.

Key Features

  • APR: Between 3.49% to 7.74%
  • Loan Amount: Ranges between $10,000 to $80,000
  • Minimum Credit Score: 580
  • Minimum Income Requirement: $1800 per month

10. MyAutoLoan

MyAutoLoan matches borrowers to a wide range of auto loans by soliciting offers from various lenders. The maximum mileage to qualify a vehicle for an auto loan refinancing is 125,000 miles. It is also important to note that the car should be the utmost ten years from the year of manufacture. The loan terms range from 24 to 84 months. MyAutoLoan does not offer services in Hawaii and Alaska.

Key Features

  • APR: Between 2.05% to 29.40%
  • Loan Amount: Ranges between $5,000 to $99,000
  • Minimum Credit Score: 575
  • Minimum Income Requirement: $1800 per month


There are several things to consider before opting to refinance an auto loan with bad credit. Perhaps the most important of all is to read the terms and conditions of the loans carefully before appending your signature. Some lenders offer very high-interest rates that might be difficult to repay, while others give what looks like a low rate but with a more extended repayment period.

Frequently Asked Questions (FAQ)

Who will refinance a car with bad credit?

Although there is no guarantee, some lenders still offer auto loan refinancing for those with bad credit. However, their terms and conditions may not be favorable, but they provide these much-needed loans.

Can I refinance my car with a 500 credit score?

Some lenders like Tresl or OpenRoad offer auto loan refinancing to individuals with a credit score of 500.

Can I refinance my car loan with Credit Acceptance?

Credit Acceptance does not offer auto loan refinancing. However, with a good payment record, you can refinance with another lender.

What credit score is needed to refinance a car with Capital One?

Capital One Auto Finance requires a credit score of 540 to refinance a car loan.

Does refinancing hurt credit?

Refinancing can lead to a low credit score through credit check that lenders usually do to determine your credit history and score in a move known as a hard inquiry on your credit report. A hard inquiry can briefly cause a slight drop in your credit score

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