Many people know that they can refinance their homes, but did you know that you can also refinance your car? In fact, bad credit car financing may be a good idea for most people with high-interest subprime auto loans. How would you know if it's a good idea to refinance a car with bad credit? And if you decide to refinance, how do you do it in a way that will actually help your loan?
When you refinance your car loan, just like when you refinance your home loan, you pay off the old loan and get a new one. Auto loan refinancing for people with no credit. For example, if you bought your car when your credit score was below 610, your interest rate could be much higher than the rate you could get today. Your monthly payments could go down quite a bit if you get a car loan with bad credit or even if you have filed for bankruptcy. Also, you could save a lot of money on interest payments over the life of the loan.
You might be able to get financing for a car loan if:
Your car loan is considered "season" if you've had it for at least a year.
You are always on time with your payments.
The amount you owe on your car is less than what it's worth.
If all of the above are true, it might be time to look into the best loans for people with bad credit with the lowest interest rates.
First, make sure you know exactly what your credit score is at the moment. You can easily find these online. Every year, you can get one free credit report. For a small fee, you could also get your credit score right now.
Second, find out how much your vehicle is worth. You don't have to get your car appraised to refinance it if you have bad credit, but you should know how much it is worth. Most companies that refinance car loans want your loan to be at least $7,000. This means that your car has to be worth at least $7,000. There are many ways to find out how much your car is worth. Check your local bookstore and the Internet. Kelley Blue Book and Edmunds Buyer Guides are probably the two most-used sources. When you look at the condition of your car, be sure to be honest with yourself, because your lender will too.
Third, look into the different lenders, Your current lender might be willing to finance cars for people with bad credit, refinance car loans for people with no credit, or even give car loans to people who have filed for bankruptcy. But you should always look around for the best place that offers the lowest rates and lets you refinance as little as possible. When those two things are true, you will also get the lowest possible monthly payment.
Fourth, just like with any other loan, make sure all the offers you get are in writing. Take as much time as you need to read all the small print and compare the different proposals. This is a big choice, and you need to think carefully about all of your options.
If you have bad credit, it may take some time and work to find a lender who will help you get a car loan. But the money you save in your checking account and over the life of the loan can easily make the time and effort well worth it.
