Many people are aware that they’ve got the option to refinance a house if they have some credit issues. They are not aware however, that they do have the option to refinance their car if they run into problems with payments or credit. For those who have a very high interest rate auto loan, it may be in their best interests to refinance the car and pay a bit less per month than they are paying.
What if your credit is still slightly less than perfect? How can you refinance? Refinance auto loan with bad credit options are out there, you just have to know where to look. More importantly, you have to know how to compare notes, compare companies and how to go about getting what you need for your financial future. There are ways to get bad credit auto refinance that can actually help you to not only improve your finances and your outlay, but may also improve your credit.
In exactly the same way that you would get a boost when you make a home refinance, you will also get that same boost, to a slightly lesser degree when you refinance your car. The car loan that you had is paid off, and as such, will reflect that on your credit rating. You may have purchased your car with a FICO score that was below 620 and if so, your interest rate was much higher. Once you’ve slightly improved your credit rating, your score goes up and your interest rate may well go down.
What this means to you is that the interest rate that you qualify for may well be much lower today if you refinance. Auto loan with bad credit ratings could be costing you a lot each month. If you can refinance, you may not only improve your credit, but lower your payments very significantly. You could actually save many thousand dollars over the cost of your loan.
So, what does it take to be approved to refinance auto loan with bad credit beginnings? You may conceivably be a good candidate to refinance your car loan if you meet the following criteria:
If your car is more than one year old, or, seasoned, as it is known in the auto loan industry, you are a good candidate to be refinanced for your current car loan and lower your interest rate.
If you have made all of your payments in a timely manner and have had very few car loan payments late, then your chances of course, are far better to refinance auto loan with bad credit at lower interest rates.
Lastly, your car value should be more than what you currently owe on your car. In most cases, unless the resale value of your car is more than the value of the loan, you won’t qualify for the refinance loan. For many bad credit car buyers, the auto dealership steered you in the direction of a car that has a high resale value. At the time it meant much higher interest rates, but now, it’s time to be grateful, because they’ve actually done you a good turn while protecting their own interests.
Before you begin to investigate how to refinance auto loan with bad credit, take stock of your current financial situation. Know what your credit score is and if it isn’t high enough to save you a bit of money on the refinance, hold off until you have slightly improved it.
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