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What Is a Good Refinance Rate for an Auto Loan?

If you’re looking to lower your monthly car payments, refinancing your auto loan may be an excellent option to consider. Refinancing can potentially allow you to significantly lower your interest rate and unlock significant savings – both on your monthly payments and over the lifetime of your auto loan.

Since getting the best interest rate is typically one of the primary goals of auto refinance, you may be wondering what is considered a good refinance rate. Interest rates have been climbing significantly for over a year now, so a good refinance rate for an auto loan today may be higher than what you could have expected several years ago when interest rates were at an all time low. However, there are still ways to evaluate whether you’re being offered a good rate from a particular lender, and you can still unlock significant savings even at these higher interest rates.

Current Average Auto Loan Refinance Rates

Auto loan rates are constantly changing, so the average rates today may be completely different from what they will be in a few months. Therefore, it’s important to research current average auto refinance rates at the time you’re ready to refinance. This way, you’ll be able to determine whether the rates you’re being offered are competitive relative to average rates.

Based on funded auto refinance loans since the start of 2023, the average auto refinance rate for individuals with excellent credit is:

Since your credit score is one of the primary factors impacting your credit score, these average interest rates will be higher for individuals with lower credit scores. The current average across all credit tiers and loan terms is 8.51%.

Factors Impacting Auto Refinance Rates

factors impacting auto refinance rate - your credit score While federal interest rates will typically establish a starting point for auto refinance interest rates, there are a variety of factors specific to your personal situation that will impact the interest rates you qualify for. These include:

Factors to Consider When Comparing Auto Loan Refinance Options

While the interest rate you’re able to secure is one of the most important factors to consider when refinancing your auto loan, there are other elements which will impact the overall value you receive from refinancing. These include:

Loan Term

The loan term refers to the duration of time it will take to pay it off in full. There is a wide range of potential loan terms, from as short as 12 months to as long as 84 months (7 years). Longer loan terms will typically come with smaller monthly payments, but you’ll typically end up paying more money over the lifetime of the loan due to the additional interest that will accrue over the longer time period.

In addition, most lenders will charge higher interest rates with longer loan terms. So even though your monthly payments are lower, you may receive less value from a longer loan term.


Some lenders will offer discounts for enrolling in autopay or signing up for some of their other products and services. This can potentially lower your interest rate by as much as 0.25% to 0.5%.

Fees and Penalties

auto refinance fees Some lenders will charge expensive origination fees for processing the loan application, underwriting and funding the loan, and other administrative services. In addition, some loans will charge expensive penalties for missing or late payments.

These fees and penalties can significantly increase the cost of your loan, and it’s important to make sure you understand how they will impact the value of your loan before you refinance.

iLending Makes Auto Loan Refinance Easy and Hassle Free

If you’re looking to get the best possible interest rate on your auto loan refinance, iLending can help. Our exclusive You First Approach™ makes refinancing easy and hassle free.

As part of our approach, you’ll work with a loan consultant who will discuss your refinance goals in detail. Using this information, your loan consultant will compare loan options across our vast network of over 50 nationwide lenders to identify the best solutions that align with your goals. We’ll review these loan options with you, and you can ask any questions you may have to ensure you have all the information you need to make the right decision.

While your loan consultant will recommend the best loan option for your specific needs and goals, you will always have final say on the option chosen. After you decide on a loan, our team will take care of everything for you. We’ll fill out the paperwork and even follow up with your existing lender to make sure your current loan is paid off properly. You’ll have peace of mind that every step was handled properly and that you’ve secured the best possible auto refinance loan for your specific needs.

On average, iLending customers save $143 per month when they refinance with us. This savings can make your life easier in many ways, adding a significant amount of money into your monthly budget that you can use in many ways.

Apply now to get the auto loan refinance process started.

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