Tips on Refinancing a Bad Credit Car Loan
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.
Requirements for Refinancing a Bad Credit Car Loan
- Have made on time payments on any existing debts (e.g. credit cards, mortgages) for at least six months
- Have made on time payments on your existing car loan for three to six months
- Have obtained your credit repot from AnnualCreditReport.com and it is well above 600
- Have been in the same job and home for at least six months
- Haven’t had a bankruptcy for three or more years
- Have paid down your debt load to a reasonable level
- Have a car that was not manufactured more than 10 years ago (some companies will only refinance vehicles less than five years old)
- Have a car with less than approximately 70,000 miles (more with some refinance companies)
- Need to refinance between $7,500 and $50,000
- Are a U.S. Resident and more than 18 years old
- Have a gross monthly income of at least $2,000 or a co-signer