Bad Credit Auto Loan Refinance Options
Bad credit auto loan refinance is an option for those who have a car loan with prohibitively high interest or other terms that make the loan a poor deal. Sometimes, credit mistakes made it impossible to get a car loan, resulting in you getting a loan when you bought your car that costs you a lot of money. If you find yourself in this situation, you should have two main priorities: you need to have a safe vehicle, and you need a plan that will allow you to refinance that bad credit loan so that you can pay for your car on the terms that you need. Fortunately, you do have options for bad credit auto loan financing.
Bad Credit Auto Loan Refinance Options
If you have a bad credit auto loan that you want to refinance, lenders in this tough economy are often willing to work with you in order to find a plan that will work. Refinancing is certainly an option at most lenders, and it can work to your advantage to be honest with your lender.
If you had bad credit when you got your initial loan then your best bet is to work to improve your credit so you can refinance that bad credit loan with ease. Take steps such as paying off debt and paying all your bills on time. The less debt you have on your cards- called your debt-to-credit ratio or credit utilization ratio- the higher your credit score will be. Plus, a history of on time payments can dramatically raise your score, even if you have past delinquencies.
Once you have taken these steps and brought your credit up a bit, start shopping around for someone who will refinance your bad credit auto loan. A new lender will look at your new credit score and can offer you a much better deal than you originally got when you bought your vehicle.
However, if you still have poor credit at the time of refinancing, you can still refinance and get a better rate in many cases. You’ll just have to do a little more work to get a new loan on better terms. You are going to have to make a strong case to your lenders, and you might even need to seek out several lenders who can compete to offer you a good loan package. Explore all of your options for bad credit auto loan refinance and select a lender that offers you a new lower interest rate with few- if any- fees for the actual refinancing.