How To Refinance a Car Loan With Bad Credit
Refinancing a car loan can save you money, but it can be hard to do if you have bad credit. The lower your credit score, the less likely you are to find a refinance loan that makes sense financially.
- It’s possible to refinance your car loan with bad credit, or a FICO Score below 580.
- You may not qualify for lower monthly payments or a cheaper loan.
- You can check your car loan refinance rates (and potential savings) without damaging your credit by filling out a form with LendingTree or prequalifying on a lender’s website.
Can you refinance a car loan with bad credit?
It can be difficult to refinance a car loan with bad credit, but it’s not impossible. Still, you could end up with high interest rates and pricey fees on your new loan.
How bad can your score be to refinance?
Although a FICO Score below 580 (or a Vantage score below 600) is considered “poor credit,” some refinance lenders might approve you with a score as low as 460.
Check your credit score for free with LendingTree Spring. You’ll get personalized recommendations on how to boost your score, and you can use Spring to track your score over time.
What rates will you get?
Just because you qualify for a car refinance doesn’t mean you’ll get lower rates than what you have on your current loan.
The average APR on bad credit refinance car loans through the LendingTree marketplace in 2024 was 15.51%.
Here’s how car loan rates vary based on your credit score, according to Experian:
| Credit score | Average new car APR | Average used car APR |
|---|---|---|
| Super prime (781-850) | 4.77% | 7.67% |
| Prime (661-780) | 6.40% | 9.95% |
| Near prime (601-660) | 9.59% | 14.46% |
| Subprime (501-600) | 13.08% | 19.38% |
| Deep subprime (300-500) | 15.75% | 21.81% |
Source: Experian’s State of the Automotive Finance Market Q4 2024
Raising your credit score from “fair” to “very good” could save you over $2,300 on your auto loan. Learn how to improve your credit.
Compare car refinance loans with LendingTree
Fill out a form
Answer a few questions about your identity, your current loan and your car. This will take about two minutes.
Compare your offers
We’ll do the loan shopping for you and connect you with up to five of our lending partners. Compare your car refinance offers to find the one that fits your budget.
Get your offers
You’ll submit a formal application with your chosen lender. If you’re approved, you can start making payments on your new car loan.
Where to refinance a car loan with bad credit
| Lender | Min. credit score | Starting APR | Loan amounts | |
|---|---|---|---|---|
 | 460 | 5.49% | $7,500-$100,000 | |
 | 500 | Not specified | $7,500-$75,000 | |
 | 500 | 5.29% | $5,000-$150,000 | |
 | 520 | 5.49% | $7,500-$99,999 | |
 | 560 | 5.49% | $5,000-$150,000 |
Should I refinance my car if I have bad credit?
Your credit score isn’t the only thing that matters when it comes to auto refinancing. Even if your credit is bad, it could still be the right time to refinance your car.
Consider refinancing if…
- Your credit score has improved: Even if your credit score is low, you might qualify for a better loan if your score is better than it was when you took out your current loan.
- Your car has equity: Compare the value of your car with how much you owe on your car loan. If your car is worth more than you owe, you have equity, and lenders will be more likely to approve you for refinancing.
- You can’t afford your current payments: Refinancing can reduce your monthly car payment by stretching out your payments over a longer term. You will likely pay more money in interest over the life of the loan, but refinancing could be worth it if it’s the only way you can afford to keep up with your car payments.
- You can add a cosigner: Having an auto loan cosigner could help you get a better interest rate. Just make sure your cosigner understands that they’re agreeing to be 100% responsible for any loan payments you miss.
Avoid refinancing if…
- Your credit score has dropped: If your credit score has fallen since you took on your car loan, you probably won’t get a better deal on a refinance.
- High market rates: When interest rates go up, it gets more expensive to borrow money. If auto refinance rates are higher than when you took out your loan, you’ll have a hard time finding a good refinance option.
- You’re near the end of your loan: Refinancing is less likely to save you money if you only have a year or two of payments left. In fact, refinancing could add a new set of lender fees and higher interest payments (which take place at the beginning of your loan, due to amortization).
If refinancing isn’t on the table, you can still get out of a car loan you can’t afford by negotiating with your lender or selling your car.
Frequently asked questions
Yes. Some lenders offer auto refinancing for credit scores of 500 or lower. However, the interest rates on these loans are usually very high, so you may not save money by refinancing. Keep an eye out for predatory lenders that take advantage of people with bad credit.
You can refinance a car loan with a credit score near or below 500. But the lower your score, the harder it is to get approved, even with bad credit car lenders.
Lenders have different car loan eligibility requirements. You could be disqualified for having bad credit or a high debt-to-income ratio. It’s common for lenders to restrict a car’s age and mileage, and many won’t refinance cars 10 years or older or that have more than 100,000 to 150,000 miles.
Yes, refinancing hurts your credit score, but any damage to your credit will be temporary as long as you make your car payments on time. But in the long run, your credit can actually improve if you stay current on your loan payments.
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