Refinancing a bad credit car loan can be quite simple if you will do some research and adhere to a few guidelines. Very simply, you will be borrowing money to pay off another debt because it will save you money in the long run due to the high interest rate that you are currently paying.
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Tips On Refinancing A Bad Credit Car Loan
Contrary to popular belief, you do not need to get your car appraised before refinancing. Since the refinance amount is based on the amount that you owe, not the amount that your car is actually worth, the lender is only concerned with how much money that you will need to borrow.
If you are planning on refinancing a bad credit car loan, make sure that you do not default on a payment. Your credit score should be reflective of improvements and be higher than when you originally financed the car as you have been making on-time payments.
If you choose to refinance a bad credit car loan, keep in mind that your interest rate might not be as low as someone who has a good credit score, but refinancing could substantially lower your payments.
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Guidelines For Refinancing A Bad Credit Car Loan
To refinance a bad credit car loan, make sure that you:
- Are at least 18 years old
- Are a United States resident
- Have a car that was not manufactured more than 5 years ago (10 years with some refinance companies)
- Have a car with less than approximately 70,000 miles (more with some refinance companies)
A lender will be more apt to refinance a bad credit car loan if you have a gross income of at least $2,000 a month and are refinancing a sum that does not exceed a predetermined amount.