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Banks That Will Refinance with Bad Credit

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It’s not easy to find affordable auto loan options if you have bad credit. Thankfully, there are many lenders who love to take the risk. Here are some of the banks that will refinance with bad credit. 

Banks that will refinance with bad credit

Auto Credit Express 

  • Loan amounts: $5,000 to $45,000 
  • Loan terms: up to 72 months 
  • APR: varies by lender 
  • Minimum credit score: 400 


  • Helps people get approved for auto loans even with bad credit, bankruptcy, or repossession.  
  • Facilitates communication between prospective car buyers and lenders with more flexible credit standards.  
  • Affiliates with financial institutions that accept co-borrowers and cosigners. 


  • The buyer is restricted to working with dealers in the auto credit express network.  
  •  Subprime lenders and “buy here, pay here” dealers generally charge higher interest rates for loans.  
  •  Some lenders could perform hard credit checks.  
  •  When applying for the first time, your SSN will be necessary. 


  • Loan amounts: $1,000 to $50,000 
  • Loan terms: starting with 12 months 
  • Minimum credit score: 585 
  • APR: 3.99% to 35.99% 


  • You won’t need to fill out multiple applications to compare prices. 
  • The resources available through LendingTree’s network may have previously been out of reach. 
  •  LendingTree can connect you with lenders specializing in auto loans for new car purchases and refinancing. 


  • Not so satisfactory customer service. 
  • The options that you get might not be up to the mark. 
  • Your information may be shared with its group of lenders.


  • Loan amounts: $5,000 – $100,000 
  • Loan terms: 24 to 84 months 
  • Minimum credit score: 575 
  • APR: 4.49% depending on the loan type 


  • A soft credit inquiry can result in up to four lender matches for applicants.  
  • The typical processing time for loan approval is under one minute.  
  • Offers the lowest rates available now, every day, on all loans, including auto refinancing.  
  •  Loan repayment funds are typically made accessible within 24 hours.  
  •  Cosigners are permitted. 


  • Possibility of receiving several loan offers that are below average.  
  • When applying for the first time, your SSN will be necessary. 
  • Very average customer service.  

PenFed Credit Union 

  • Loan amounts: $10,000-$100,000 
  • Loan terms: 6 – 84 months 
  • APR: 5.19-17.99% 
  • Minimum credit score: 580 


  • Pre-approval through a soft credit check gets you up to six options with rates and payment amounts for varying terms. 
  • Customer service is offered throughout the week. 
  • Online applications are accepted. 
  • Provides more attractive refinancing terms for vehicles of recent model years and fewer than 7,501 kilometers. 


  • The loan application process does not begin until you are a confirmed Credit Union member. 
  •  Not an automatic payment discount provider. 
  •  Refinancing minimums are greater than those of most banks. 
  •  When applying for the first time, your SSN will be necessary.

Navy Federal Credit Union 

  • Loan amounts: $243-no max 
  • Loan terms: 12- 96 months 
  • APR: 4.54-18.00% 
  • Minimum credit score: did not disclose 


  • Provides pre-qualification after a minimal review of credit history.  
  •  Easily accessible nationwide.  
  •  Constantly accessible support staff.  
  •  Does not have a cost for starting the loan.  
  •  All application steps are handled online. 
  •  Cosigners are permitted. 


  • Website is not available in Spanish.  
  • Doesn’t accept co-borrowers. 


Alliant Credit Union 

  • Loan amounts: $4,000-$1,000,000 
  • Loan terms: 24-84 months 
  • APR: 6.52-26.40% 
  • Minimum credit score: did not disclose 


  • If you sign up for automatic payments, you can save money.  
  • There are no limits on the age or mileage of the car.   
  • The application can be filled out and submitted entirely online. 


  • There is no option for a soft credit check pre-qualification.  
  •  To qualify for a loan, you must be a Credit Union member.

Consumers Credit Union 

  • Loan amounts: $7,500-$500,000 
  • Loan terms: 24-84 months 
  • APR: 5.54-21.24% 
  • Minimum credit score: 620 


  • There are no limitations on driving.  
  • You can save money if you sign up for automatic payments 
  • Repays the prior lender instantly.  
  •  Cosigners are permitted. 


  • Credit Union membership is required to get a loan.

Truist bank 

  • Loan amounts: starting at $3,500 
  • Loan terms: up to 84 months 
  • APR: 5.82% – 12.97% 
  • Minimum credit score: did not disclose 


  • Fast credit approval and funding. 
  • Provides competitive rates. 
  • Help with payments temporarily at times of crisis.  
  • Once authorized, the interest rate is guaranteed for 30 days. 


  • Applying online is not possible. 
  • Only 17 states and the District of Columbia have physical branch locations.  
  • There is a severe lack of up-front detail regarding necessary qualifications.  
  • People who aren’t members have to submit their applications in person.

banks that will refinance with bad credit | Refinance your auto loan and save around $1850 annually

What are the different types of auto refinancing? 

Refinancing a car loan can reduce monthly payments by negotiating a new interest rate and loan term. You get to pay your new lender and new loan with new terms. 

Cash-out refinancing 

Cash-out refinancing is a service offered by many auto lenders. The equity in an automobile is the price of the vehicle minus the outstanding loan sum. This refinancing option lets you turn your home’s equity into liquid funds.  

When taking cash out, your loan debt will increase. If you don’t negotiate a lower interest rate, your loan terms and/or payments will increase. If you need money quickly but have low credit, a cash-out refinance is your best bet. 

Re-title refinancing 

The title to a car proves who the rightful owner(s) are. A cosigner can be removed from a car title by refinancing the loan. The conditions of a loan can be modified during a re-title refinancing, especially if interest rates have dropped since the loan was first taken out.  

Title transfers must be processed through your state’s DMV. Lenders take care of everything from doing a new title search to perfecting their lien (providing them the right to repossess the vehicle if you default on the loan) on the vehicle. Depending on how your state operates, you or the lender may wind up with the new title. 

Lease buyouts 

When you lease a car instead of buying it outright, you only have to account for the vehicle’s depreciation over the course of the lease. When the lease term ends, you typically return the vehicle. If you opt to keep the car at the end of your lease, you can get new finance for its remaining value (the residual value agreed upon at the outset of the lease). 

How do I apply for auto refinancing? 

Auto refinancing is made simple by online lending networks, which can locate several competitive offers in response to a single inquiry. If you’re prequalified, you can get between one and four offers within minutes after submitting the brief request form. 

When you apply for a refinance with a direct lender, they will likely run a hard inquiry on your credit. This will show up on your credit report for two years, but it shouldn’t affect your score or history during that time. 

What is the lowest credit score for refinancing? 

To refinance a car loan, a high credit score is not required. However, there is a range that constitutes a “good credit score” for the purposes of refinancing an auto loan. The best interest rates are often available to those with credit scores above 700, while those with scores between 660 and 700 have access to average rates. 

How much money can I get out of refinancing my car? 

How much money you can save by refinancing your car loan depends on the interest rate. If interest rates have dropped since you took out the loan, you could save hundreds, if not thousands of dollars. Instead of encouraging vehicle refinancing, rising rates have the reverse impact.  

Rates for auto refinancing based on credit rating

Loan term Excellent credit
Good credit
Fair credit
Poor credit
639 or less 
36 months 4.67% 6.48% 8.03% 11.84% 
48 months 5.55% 7.15% 10.11% 13.27% 
60 months 5.68% 7.05% 9.81% 13.43% 
72 months 6.15% 7.16% 9.84% 13.35% 

Rates are current as of Mar. 2023 

If your credit has improved since you took out the loan, you may be eligible for a lower interest rate. A higher credit score could grant you access to an affordable APR if everything else is the same. 

How does refinancing impact my credit? 

When you apply for auto refinancing, the lender will likely do a credit check. Your credit score could somewhat decrease as a result of this. A cash-out loan may also boost your debt-to-income ratio. A higher percentage will likely result in higher interest rates and reduced access to borrowing in the future. 

Refinancing a car loan usually has a small impact on credit scores. If refinancing helps you to pay off the debt sooner, you may be able to raise your credit score. The monthly loan payment you no longer owe might be put toward paying down other debts, such as credit card balances, for maximum benefit. 

Type of entryTime it stays on a credit report 
Soft credit report inquiry No impact 
Hard credit report inquiry 2 years 
Delinquent payment (30 days+) 7 years 
Defaulted account 7 years 
Foreclosure 7 years 
Bankruptcy discharge 7-10 years 


Can you refinance an auto loan with bad credit? 

In a nutshell, yes, you can refinance a car loan even if you have low credit. On the other hand, you might not be able to choose from as many loan providers. Some creditors won’t work with people who don’t have perfect credit. Furthermore, locating competitive interest rates while shopping around for a car loan refinance will be challenging. 


Auto loan interest rates by credit score 

Credit score range Average loan rate for used car purchase 
781–850 3.68% 
661–780 5.53% 
601–660 10.33% 
501–600 16.85% 
300–500 20.43% 


Can I refinance an underwater auto loan? 

When you get a guaranteed asset protection policy, you can refinance your auto loan even if you owe more than the car is worth. If you have an auto loan and lose your automobile to theft or damage, a guaranteed asset protection policy will help you pay it off. A GAP policy often costs you between $600 and $900 per year. 

Bottom line 

Even with bad credit, there are still ways to refinance your auto loan and potentially lower your interest rate and monthly payment. If you have low credit, you can still refinance your auto loan. Additionally, you may take actions to improve your credit score and qualify for lower interest rates.  



What is the lowest credit score you can have to refinance a car? 

When it comes to auto refinancing, there is no lowest or minimum credit score required. However, your lending alternatives will contract as your credit score drops. If your credit score is low, you should expect to pay substantially higher interest rates when you refinance your car loan. 

Is it smart to refinance your car loan? 

Refinancing your car loan could be the answer if you want to save money each month. But it’s up to you to decide if refinancing your loan is a good choice for you.  

How soon can you refinance a car loan with bad credit? 

Technically, you can refinance your auto loan immediately, even if you have terrible credit, however some lenders may have additional restrictions. But each time you refinance, you’ll have to pay expenses like application and origination charges that you won’t get back. Refinancing loans, and even the application process for one, can have a negative impact on your credit score. You should usually wait at least a year before considering refinancing. 

Can you refinance with a 500 credit score? 

A credit score of 500 is good enough to qualify for a vehicle loan refinance. However, you should anticipate high-interest rates if you have a credit score of 500 or lower. 

 Do you need a down payment to refinance a car? 

To refinance a vehicle, a down payment is not required. However, refinancing requires equity, which might be cash or a percentage of the loan’s original amount. 

Can you prequalify for a refinance auto loan with bad credit? 

You may prequalify for an auto refinance loan from several lenders with just a light credit inquiry. You’ll need to provide some personal and vehicle details to get prequalified for a car refinance. It’s crucial to note that getting prequalified is not the same as getting preapproved, which does involve a rigorous credit check. 

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