More and more customers apply for auto loans nowadays, but sometimes they get unsatisfied with the car loan interest rate, the duration of the loans or the amount paid every month. In these cases, the ideal option is to refinance, which implies a new loan to pay the balance of the existing car loan.
When should you refinance your auto loan
The most important factors that the customers should have in sight are the age of the car and the mileage. The choice of refinancing for a longer loan term results in a smaller monthly payment, and that is one of the reasons clients choose to refinance auto loans. But money can be saved this way also through a better score, which can get the customer a lower interest rate.
Refinancing is usually being considered after the first six months, depending on the credit score.
Best auto refinancing companies
There are lots of auto loan refinancing companies, and currently the best are OpenRoad Lending, LendingTree and LendingClub.
With an experience of over 10 years, open road auto loan is one of the big players on the market, having hundreds of thousands of clients refinancing their loans. By doing so, they saved an average of over $100 monthly.
The APRs are, depending on the refinanced loan duration:
- 1.99% for up to 24 months,
- 2.99% for 25 to 48 months,
- 3.39% for 49 to 60 months,
- 3.79% for 61 to 72 months.
The pros of OpenRoad Lending refinancing are:
- low APRs,
- an average of $100 per month savings
- a fast online application,
- the customer can skip a payment,
- customer referral program can earn gift cards,
- there is no application fee.
There are though some cons:
- the car has to be 8 years old or newer,
- the mileage has to be no more than 140,000 miles,
- the maximum loan cannot exceed 120% of the wholesale of the vehicle,
- commercial vehicles and vehicle for business use do not qualify.
What makes OpenRoad Lending unique is the amount of monthly savings but also the low APRs, the customers saving an average of 5.6% of their existing APR.
Then, LendingTree has one of the best auto loans rates this year. It helps customers refinance by matching with lenders, based on several details provided by the client.
The pros to know about auto loans refinancing with LendingTree:
- APR starting from 2.89% for new car loans and 3.83% for used car loans,
- is the largest online lending marketplace in the United States,
- the customer can compare auto loan rates from about 300 banks and lenders, for free,
- tools like loan payment calculator and free credit score finder,
- even bad credit is OK.
These are the cons:
- too much personal information is collected,
- that personal information is sold to other service companies.
What makes LendingTree unique is matching of customers to lenders, which helps every client find the car they want.
Finally, LendingClub is another option, being well known for auto loan refinancing. After sending the initial application, customers get instant offers.
These are some pros for LendingClub:
- loans up to $50,000, and APR rates as low as 2.49%,
- more than 1.5 million people reached for LendingClub,
- the credit score is not affected.
There also some cons:
- the car has to be 10 years old or newer,
- the mileage has to be no more than 120,000 miles.
What makes LendingTree unique is low APR rates and the big number of clients so far.
There are plenty of options when you need to refinance the auto loan, to match the current need. Refinancing an auto loan helps saving money and even time. Also, the conditions for the age and mileage of the cars eligible for refinancing are customer-oriented and very handy.