Refinancing a bad credit car isn’t impossible, but it can be a challenge for borrowers with low credit scores. If you take out a high-risk car loan, your interest rate will likely be high. Refinancing can lower the interest rate and save money. Here’s how.
Check the requirements for refinancing. To keep the car you love and get a new car loan on new terms, you must meet the qualifications of the lender. This could be your current lender or a new one.
All lender requirements vary, but in general, your credit should be as good (a score of around 670 or higher) or better than it was when you took out your loan. Most refinancing is reserved for borrowers with good credit. However, if you originally took out a high-risk car loan because of bad credit, your credit has improved, and you have kept your current loan for at least one year, you may be a race to save money by refinancing.
Is your car eligible for refinancing? Your vehicle also needs to meet certain specifications. Typically, the vehicle must be in good condition, not very old, and at least 100,000 miles in altitude. Most lenders also prefer to refinance auto loans that are not very new or very close to repayment. Many require you to be current on your loan and not in a passive equity position.
Pros and cons of refinancing. Refinancing replaces an existing car loan with a new one. It has advantages like keeping your car and saving money on your payments every month. You can even raise your credit score if you are responsible for your loan.
To save money on a monthly car loan, you can lower the interest rate, extend the loan term, or both. To save in general, make sure you get the lowest interest rate possible. If you just extend the term of the loan without lowering the interest rate first, it can cost you more overall.
When you need bad credit car loan refinance but don’t know where to turn, we want to help you. express credit card It works with a large network of service providers who are ready to help meet your refinancing needs. Our Auto Loan Refinance Application Form can connect you to a refinanced lender near you.