How To Refinance a Car Loan

How to lower a car payment

The payment you started making when you purchased your vehicle – that figure you see subtracted from your bank account each month – is not necessarily the one you must live with until the car is paid off.

Although you committed to the auto loan by signing the contract, there are various ways to lower a car payment, and refinancing is one of the easiest and most popular options.

These two examples show how it may drop your monthly outlay:

Reduced APR

You might be able to secure a lower annual percentage rate (APR) by refinancing with another lender. There are a number of reasons for this. Market interest rates may have improved or your own credit score has got better, for instance. It’s also possible you didn’t get the best deal available first time around.

There’s no minimum period you have to sit through before seeking refinancing. If approved for a lower APR, it will typically reduce your car payment when the loan term in not extended, or extended by much, and may save you hundreds or even thousands of dollars in interest charges over the life of the loan.

Longer loan duration

This is another simple way for refinance customers to achieve a lower auto payment. Spreading the loan amount over a longer period will reduce what you need to pay each month. You should also know that, depending on the APR, you may pay more in interest by the end of the loan. Someone whose finances have changed and who needs to make room in their budget for additional expenses, for example, could be looking to lower their payment in this way.

The process of refinancing your car

You’ll want to check your credit history before applying for auto financing in general, advises the Consumer Financial Protection Bureau. Check for errors that might hinder access to credit and, if approved, the best refinancing rates and terms.

Get the payoff amount on your existing note – this is the amount to be refinanced – and check you’re not upside down on the loan before shopping around for refinancing options.

If approved, use an auto refinance calculator to see how much you might save. Enter the details of your current loan and those of a new loan offer to compare.

Did you get the green light from multiple lenders? Pick the best option for your needs.


Learn more about how to refinance a car loan.

Applying online takes just a few minutes, it’s free, and you’ll get an instant decision.

Get Started


See what you may save with RoadLoans

With RoadLoans, you may be able to:

  • Skip your auto payment for up to 60 days*
  • Lower your payment*
  • Lower your rate*

As an experienced auto lender, we streamline the refinancing process to make it super easy.

Here’s how:

Get started for free – There are no application fees

We’re full-spectrum – RoadLoans accepts applications from consumers with all types of credit. If you have bad credit,† have been through credit counseling or bankruptcy, you can still apply for a lower car payment.

We’re fast – Our one-page, online application takes a few minutes to complete.

We’re straightforward – If approved, just download, sign and return your documents, and let us do the rest. We offer fixed-rate loans and there are no prepayment penalties if you want to pay off the note early.

Refinancing a truck

Can I refinance my truck with RoadLoans?

We accept applications to refinance cars, SUVs and pickup trucks, so if you feel stuck with a monster payment, take a few minutes to apply and get a quick decision. The refinancing process is convenient whichever type of vehicle our customers drive. We don’t, however, offer auto refinancing for commercial trucks or semi trucks.


Apply to Refinance Your Car, Truck or SUV.

Applying online takes just a few minutes, it’s free, and you’ll get an instant decision.

Get Started


4 More ways to lower a car payment

Buy a cheaper car next time
Perhaps you purchased a car you couldn’t really afford – many people do it. Even if you didn’t overextend your finances, opting for something less expensive, such as a used car instead of a new one, and saving for a good down payment, may result in smaller auto payments in future.

Looking to trade in your vehicle? Be aware that a dealer could offer to roll over any outstanding balance on your current note into the new loan, which will add to the payment amount under the new contract.

Consider building credit If you have bad credit, waiting until your credit history improves before changing vehicles might help you get more favorable loan terms and a reduced monthly payment.

Request an auto loan modification If you’re having a hard time keeping up with your car payments and are worried about repossession, one option is to contact your lender about a modification to your loan. Auto loan modifications typically involve deferring missed payments to the end of the loan or extending the loan duration to lower the monthly payment. Creditors rarely reduce the principal amount or the interest rate in such cases, advises the Federal Trade Commission. And remember that extending the loan could mean paying more in interest. If you find yourself in trouble, it’s best not to delay. “The longer you wait to call, the fewer options you will have,” says the FTC.

Lease a vehicle A lease payment is generally lower than an auto loan payment for a comparable vehicle because you’re only paying to use the car for a certain period of time. Of course, that means when the lease ends, often after two or three years, you’ve built up no equity in the vehicle.

Ready to look for a lower car payment?

Apply for Auto Refinancing 
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These statements are informational suggestions only and should not be construed as legal, accounting or professional advice, nor are they intended as a substitute for legal or professional guidance.

RoadLoans is not a credit counseling service and makes no representations about the responsible use of or restoration of consumer credit.


* View disclosures and offer information.

† “Bad” or “Poor” credit generally is considered a FICO score around 600 and below by sources including the Consumer Federation of America and National Credit Reporting Association (reported by the Associated Press), Bankrate.com, Credit.com, Investopedia, NerdWallet.com and others. The Congressional Budget Office identifies a FICO score of 620 as the “cutoff” for prime loans. FICO scores are not the sole factor in lending decisions by RoadLoans.com and Santander Consumer USA.