Refinancing can be an excellent option for people who currently have an auto loan and are looking to lower their monthly payment, get a better interest rate, or change how long it will take to pay off the loan.

In most cases, your credit score needs to be 500 or better for you to enjoy a lower rate. There are ways to repair your credit score -- this can be especially useful for people who have had credit issues in the past, and refinancing provides an opportunity to get more favorable financing terms. Get my Credit Score

Refinancing Facts

• Average saved $990 in 2020
• 42% saved over $1,000
• Average rate on a refinance loan is 5%

Americans saved an average of $989.72 a year on refinancing their car in 2020, the largest amount since 2016. Of those who refinanced, 42% of successful refinancing applications saw annual savings of $1,000 or higher. With an average interest rate of 10.5% on their existing loans, the average interest on the refinanced loan was 5% — the greatest interest rate reduction in eight years.

What is Refinancing?

Refinancing can be an excellent money-saving strategy when you finance a car and did not receive favorable terms. The interest rate you are able to qualify for is largely determined by your credit score, so when you finance a car when you have less than perfect credit, it's likely that you received an APR that was higher than average.

Should I Refinance My Car?

Refinancing can be an excellent money-saving strategy when you finance a car and did not receive favorable terms. The interest rate you are able to qualify for is largely determined by your credit score, so when you finance a car when you have less than perfect credit, it's likely that you received an APR that was higher than average.