There is no single credit score cutoff for refinancing a car loan. Most lenders look for a FICO score of at least 600 to offer competitive rates, but some approve borrowers with scores as low as 480. The real question isn’t whether you can refinance, but whether refinancing at your current score will actually save you money.
How Your Credit Score Affects Your Rate
Your credit score is the biggest factor in the interest rate a lender will offer you. The difference between a strong score and a weak one can mean thousands of dollars over the life of a loan. Here’s how average auto refinance rates break down by credit tier, based on Experian data using VantageScore 4.0:
- 781 and above: 4.66% (new car) / 7.70% (used car)
- 661 to 780: 6.27% (new car) / 9.98% (used car)
- 601 to 660: 9.57% (new car) / 14.49% (used car)
- 501 to 600: 13.17% (new car) / 19.42% (used car)
- 300 to 500: 16.01% (new car) / 21.85% (used car)
To put those numbers in perspective: on a $20,000 used car loan with a 60-month term, a borrower at 9.98% would pay about $5,400 in total interest. A borrower at 19.42% would pay roughly $11,200. That gap of nearly $6,000 is the cost of a lower credit score. This is why refinancing makes the most sense when your score has improved since you took out the original loan, or when market rates have dropped enough to offset a mediocre score.
Minimum Scores Lenders Actually Require
Most lenders don’t publicly share a hard minimum, but the ones that do reveal a wide range. Among major national refinancing platforms, minimums start as low as 480 (Auto Approve) and go up to 660 (LightStream). Several well-known lenders sit in between: Ally accepts scores starting at 520, RefiJet at 540, Auto Credit Express at 550, Caribou and iLending at 580, and Gravity Lending, Consumers Credit Union, and MyAutoloan at 600.
A score below 600 won’t necessarily lock you out, but it narrows your options and pushes your rate into double digits. If your score is in the 500s, you’ll want to shop specifically among lenders that serve subprime borrowers rather than applying broadly and collecting rejections that could ding your credit further. Credit unions are often more flexible than big banks, especially if you’re already a member.
Credit Score Isn’t the Only Factor
Even with a solid score, lenders look at several other pieces of your financial picture before approving a refinance.
Debt-to-income ratio (DTI): This is the percentage of your gross monthly income that goes toward debt payments, including your car loan, mortgage or rent, credit cards, and student loans. Lenders generally prefer a DTI under 36%. Some will approve borrowers up to 50%, but anything above that signals you’re carrying more debt than your income comfortably supports. To calculate yours, add up all your monthly debt payments and divide by your gross monthly income.
Loan-to-value ratio (LTV): This compares how much you still owe on the car to what the car is currently worth. If you owe $18,000 on a car worth $15,000, your LTV is 120%, meaning you’re underwater. Most lenders cap LTV at 100% to 125%. If your car has depreciated faster than you’ve paid down the loan, refinancing may not be possible until you close that gap, either by making extra payments or waiting.
Vehicle age and mileage: Many lenders cap eligibility at around 10 years old or 125,000 miles. If your car exceeds those limits, you may still find a lender willing to work with you, but expect a shorter loan term (typically 36 to 48 months) and potentially a higher rate. Older vehicles carry more risk for lenders because they’re harder to resell if you default.
When Refinancing Makes Financial Sense
Refinancing saves money only when the new rate is meaningfully lower than your current one. A general rule: if you can cut your interest rate by at least 1 to 2 percentage points without extending your loan term significantly, it’s worth pursuing. Common scenarios where refinancing pays off include:
- Your credit score has improved since you first financed the car, perhaps because you’ve been making on-time payments for a year or two.
- You originally financed through the dealership at a marked-up rate. Dealer-arranged financing often carries a higher APR than what you’d get shopping directly with a bank or credit union.
- Market rates have dropped below what you locked in.
Watch out for extending the loan term just to lower your monthly payment. Stretching a 36-month remaining balance into a new 60-month loan might reduce what you pay each month, but you’ll pay more interest overall and risk going underwater as the car depreciates.
How to Improve Your Score Before Applying
If your score is on the edge, even a modest improvement can drop your rate into a lower tier. Moving from 590 to 610, for example, could shift your used car rate from roughly 19% down to around 14%, saving you thousands.
The fastest levers to pull: pay down credit card balances to get your credit utilization below 30% of your total limits, dispute any errors on your credit reports through the three major bureaus (Equifax, Experian, TransUnion), and make sure all current accounts are paid on time. Avoid opening new credit accounts in the months before you apply, since each application triggers a hard inquiry. If you’re rate shopping among multiple auto lenders, try to submit all your applications within a 14-day window. Credit scoring models treat clustered auto loan inquiries as a single inquiry, so shopping around won’t hurt your score the way scattered applications would.
What the Application Process Looks Like
Most auto refinance applications take 15 to 30 minutes online. You’ll typically need your current loan account number, the car’s VIN (found on your registration or the driver’s side dashboard), proof of income such as recent pay stubs, and a valid ID. Some lenders also ask for proof of insurance.
After you apply, lenders usually return a decision within minutes to a few business days. If approved, the new lender pays off your old loan directly, and you start making payments to the new lender. The entire process from application to payoff generally takes one to three weeks. There’s no cost from most lenders for the application itself, though a few charge origination fees, so check before you apply. Also confirm with your current lender that there’s no prepayment penalty on your existing loan, which is rare for auto loans but worth verifying.