Bad Credit Auto Loan Refinance - Bad Credit Auto refinancing tips

Written by: Carrie Reeder




Most people know they can refinance their homes, but did you know that you can also refinance your car? In fact, for many people who have high interest sub prime auto loans, refinancing their auto loans may be a wise decision. How do you know when refinancing your bad credit car loan can be a good idea? And once you have decided to refinance, how should you go on doing what you really improve the status of your loan?

Just as when you refinance your home loan, refinancing your auto loan the old loan is paid in its entirety and is replaced by a new loan. If you bought your car when your credit score is below 620, the interest rate on your auto loan can be significantly higher than the interest rate you can qualify for today. By refinancing your bad credit auto loan monthly payment may go down considerably. Also, over the life of the loan you can save several thousand dollars in interest payments.

You may be a candidate for a refinance car loan, if

Your car loan has become "seasoned", ie if you have had at least one year.

It has made its payments in a timely manner.

The value of your car is more than the amount you owe on it.

If all of the above statements are true, then it may be time to investigate refinancing your car.

First, make sure you are fully aware of the current status of your credit report and credit rating today. Both are readily available online. You are entitled to one free credit report every year. Your current credit score (FICO score) should also be available for a nominal fee.

Second, determine the value of your car. After having evaluated your car is not a requirement for refinancing your auto loan, but you must know its value. Most companies require auto refinance loan the loan is at least $ 7500 for your car must be worth at least that amount. At your local bookstore and online there are many resources for estimating the value of your car. Two of the most popular sources of Kelley Blue Book and Edmunds Buyer Guides. Make sure you have a realistic eye when studying the condition of your car, you can be sure your lender.

Third, research available lenders. Perhaps your current lender will be open to refinancing your car. However, you should compare prices for the institution that will give you the lowest interest rate and refinance as small an amount as possible. When these two conditions are met then you also get the lowest monthly payment available.

Fourth, as with any loan, have all offers in writing. Take the time to read the fine print and compare proposals.

Finding a lender to refinance your auto loan bad credit may take some time and effort. The savings to your pocket each month and over the life of the loan, however, can easily make the time and effort worthwhile.