Credit Repair

Guide to Refinancing an Auto Loan with Bad Credit

Just because the FICO score is not at par, it does not mean that there is no way to refinance an auto loan with bad credit. It is just that you may not be able to get the best rates, but since the refinancing option is always open, you can get much better rates in future by doing another refinance once you achieve a better . Depending upon the specific purpose you want to achieve, you may end up having a higher/lower interest rate and/or a longer/shorter loan term. Following is a brief rundown on how to go about it.

Find out the Exact Balance on Your Current Loan Account

The first thing that you have to do is to find out how much balance is still due on your current car loan account. You can look into the most recent statement for this information. Alternatively, you can give a call to the lender and ask them to provide you the details through email or by sending another statement. Do not consider the verbal answers as correct. The customer service representative that you are talking to you may not provide you correct information. So, make sure you get all the details in writing.

Determine the Current Sales-Value of Your Car

The next step is to find out how much your car is worth. You will not be able to qualify for a refinance loan with bad credit unless the current sales value of your vehicle is more than the amount of money that you still owe to your current lender. You can contact those who deal in used cars to find out the value of your vehicle.

Prepare a Good Payment History

You have bad credit, that’s ok, but if you are also making regular defaults in repayment, this will make your profile much weaker and it will almost become impossible for you to qualify for a refinance program. Therefore, if you are serious about refinancing but you have a bad payment history, you should first try to build a good payment history, such as by being current on your payments for the next 5-6 months. Once you do that, you will not only have a little better credit score, but you also have a chance to qualify for better refinancing programs.

Contact a Sub-Prime Auto Loan Lender

When it comes to , sub-prime car loan lenders may be your best choice. You will end up wasting a lot of your valuable time if you are researching your options with prime lenders. A wise strategy is to utilize that time in researching different high-risk or sub-prime auto loan lenders. The best thing about these lenders is that they specialize in bad credit refinances. They are very unlikely to reject your application. What is more, they can provide an array of options to choose from.

Request a free, no-obligation quote from 3-4 (or more) lenders and then compare the terms and rates they are offering with their refinancing programs for auto loan with bad credit. It will make it very easy for you to choose the best option.


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Posted in Credit Repair, Credit Score, Debt And Credit | 6 Comments »

6 Responses to “Guide to Refinancing an Auto Loan with Bad Credit”

  1. Abel says:

    Yes, it is possible to get a credit report online. There is a law which states that you are permitted a free copy of your report once in a year from each of 3 credit Bureaus. If you want to see your credit report online. This is absolutely free of cost service. There are so many websites are available with same name. They will try to approach for paid membership, so it is advisable that not to go through with that websites.

  2. jack says:

    Can I take up a credit repair company?

  3. abel says:

    Yes it is possible that you can take up a credit repair company, but it is possible only if that your intention is not to do your own credit repair. Credit Repair Company is very costly and it is used to improve if your credit score are “between “hundred to one-fifty points. The charge will be taken by the company is $500.

  4. jack says:

    How do you know about your credit score?

  5. abel says:

    Your financial life may depend on credit score. If it is lower than 550 score then approval for loans or credit is impossible. Also it is impossible to get credit cards. High rate of interest will be charge as compare with regular borrower so it is advisable to you to improve your credit score if it is low as soon as possible.

  6. James says:

    A very nicely written, knowledgeable article for borrowers with not a good repayment track of vehicle loan can still go for the refinancing of their loan by doing some measures to improve their payment track. It is quiet possible that this time you will be offered a loan on a rate higher to the previous one. Prime thing you should know is the exact outstanding amount of you loan amount and it should be with you in writing. You know the amount outstanding just go for the current valuation of your vehicle , because this is the major factor in getting a fresh finance. Current value of the vehicle should be more than the amount outstanding on it. A good valuation can be done by the dealers doing the business of used vehicles. Try to schedule your running loan payments as this will improve a bit of your track thus help in getting a fresh finance. If you can do it for at least 06 months this will really do a good job for you. One thing that now doesn’t approach to your main lender instead go to agents for refinancing.

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