APR spread is the borrower's contract rate minus the current market average APR. A borrower at 12.5% against a 7.5% market average has a 5-point spread, which is the quantifiable savings you pitch.

Is refinancing worth it on an auto loan?

It is worth evaluating when the rate spread is large enough that the monthly payment change survives origination costs and the remaining term is long enough to realise the savings. Late-term loans with small balances rarely clear that bar.

Does equity affect refinance eligibility?

Yes. Lenders secure the note against the vehicle, so a loan that is underwater is harder to place. EquiLane scores equity at 40% of the composite lead score for that reason.

How is the market average APR set?

It is a configurable setting in the scoring panel. Changing it re-scores the entire book live, so the whole pipeline reprices as rates move.

How do you identify auto loans that are ready to refinance?

Short answer

A loan is refinance-ready when its APR sits meaningfully above the current market average and the borrower still has enough term and equity for a new lender to underwrite. EquiLane measures APR spread — the borrower's rate minus a configurable market average, defaulting to 7.5% — and combines it with equity position and loan age to rank refinance opportunity from 0 to 100. Leads more than six points above market saturate the APR component of the score.

What criteria define a refinance candidate?

APR above the configured market average (default 7.5%)
APR spread of up to 6 points earns the full APR sub-score
Non-negative equity so a lender can secure the note
Remaining term long enough for the payment change to be material

How is this segment scored?

The 0-100 lead score is a weighted blend of equity (40%), APR spread versus market average (25%), loan age with a 24-48 month sweet spot (20%) and credit tier (15%).

A lead is flagged Hot when equity is at or above $3,000 AND either the APR is above the configured market average (7.5%) or the borrower is prime with 36+ months on the loan.

Key terms

APR spread: Borrower APR minus the configured market average APR.
Refinance candidate: A borrower paying above market APR with non-negative equity and usable remaining term.
Payoff balance: The remaining principal required to close the loan today, derived from an amortization schedule.

Questions about refinance candidates

What is APR spread?: APR spread is the borrower's contract rate minus the current market average APR. A borrower at 12.5% against a 7.5% market average has a 5-point spread, which is the quantifiable savings you pitch.
Is refinancing worth it on an auto loan?: It is worth evaluating when the rate spread is large enough that the monthly payment change survives origination costs and the remaining term is long enough to realise the savings. Late-term loans with small balances rarely clear that bar.
Does equity affect refinance eligibility?: Yes. Lenders secure the note against the vehicle, so a loan that is underwater is harder to place. EquiLane scores equity at 40% of the composite lead score for that reason.
How is the market average APR set?: It is a configurable setting in the scoring panel. Changing it re-scores the entire book live, so the whole pipeline reprices as rates move.

Related lead segments

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