Lower rates, more approvals, and for the first time this year, borrowers with credit scores below 700 saved $100+/month refinancing their car loans. This Month's Auto Refinance Highlights ● The current average auto refinance interest rate has dropped from 6.51% to 5.67%. ● The average interest rate…
The average auto refinance interest rate inched up by just a handful of basis points, climbing from 6.23% to 6.42%. But according to RateGenius.com data, applicants with credit scores of 750+ are getting rates under 3% on average.
The monthly Auto Refinance Rate Report is an analysis of anonymized completed auto refinance applications and funded (closed) loans in our network of more than 150 lenders nationwide.
Current average interest rate
Q1 2021 Recap: Auto Refinance Rates and Savings
Auto refinance interest rates remain stable as the U.S. economy makes a comeback. While interest rates have been rising for other consumer lending products — like mortgages — changes in auto refinance interest rates have been relatively small.
The average overall auto refinance interest rate in March was 6.42% for all approved auto refinance applicants, just slightly higher than February’s overall average. Applicants with credit scores 700 and above saw a slight dip in rates.
Here are the monthly average rates for the first quarter of this year.
The average auto refinance savings in March was $89.63 per month for borrowers who successfully completed the auto refinance process and funded their loans. The average auto loan balance refinanced remained relatively unchanged at $23,271.
April 2021 Auto Refinance Rates
The current average auto refinance interest rate is 6.42%. This is the average across all loan terms (36 to 72 months) and all credit scores (Poor to Excellent) for approved loans in our network over the last 30 days.
Rates are very different depending on the borrower’s credit score. Those with credit scores 750+ are getting rates under 3% on average, with rates varying with the loan term. Subprime borrowers with credit scores below 640 are seeing rates around 12% on average.
Below are the current average auto refinance rates by credit tier and loan term.
Will Auto Refinance Rates Rise, Fall, or Stay the Same This Month?
When banks and credit unions set their interest rates, they look at the target federal funds rate. The Federal Reserve dropped rates in response to the COVID-19 pandemic back in March of last year, and lenders in the RateGenius network lowered rates by one full point before the month was even over.
The Fed has been vocal about their commitment to keep the federal funds rate low until the economy is good health. In their most recent Federal Open Market Committee (FOMC) statement last month, they wrote:
It’s safe to say that auto refinance rates will remain low over the month. However, if you’re ready to refinance your car loan, you can potentially save a significant amount of cash now.
RateGenius analyzed data on customer applications for auto loan refinancing made between January 1, 2021 and April 8, 2021. This dataset included thousands of anonymized completed auto loan refinance applications across all 50 states. We analyzed interest rates, refinance savings, and auto loan debt across all credit tiers and loan terms (36 to 72 months). Interest rates are based on all applications approved across all states, credit scores, and loan terms. Savings and loan balance data only include funded (closed) loans.