Refinance a Car Loan with Bad Credit

The first thing that you will need to do, in order to refinance a car loan with bad credit is to get all your ducks in a row, so to speak. First, find out how much is left to pay on the loan you have. You can contact your present car loan representative and they will be able to tell you what the amount is left on your present car loan, or if you get bills in the mail, it should be on them. The company that you have now may let you refinance right with them. As with any loan or refinance, there is certain information necessary when filling out the application. Make sure that you have all of the information you will need, such as proof of income, creditor's names and amount owed to them and what you pay them per month, a list of all of your monthly expenses, and the total amount that is left on your present car loan.

Some companies will show you your credit report, and may give you a copy. It is a good idea to know what is on your credit. It doesn't hurt to ask to see your credit report, in fact, I am almost certain that most car dealers will ask you, while filling out a loan application, if you are going to want to see your credit report. You can also get a free credit report, once a year, from the 3 main credit reporting agencies. They are Experian, TransUnion, and Equifax. You can find information for each of these companies by typing in the words “credit reporting agencies” into your web browser. You can get the forms to fill out for your free credit report right from their web sites, and then you mail them, one for each company. This information will help you answer the question: "Can I refinance my car loan with bad credit?".

How To Refinance a Car Loan with Bad Credit

There are several car dealers that are willing to refinance your car loan if you have bad credit. I would suggest staying local, so that you can go and discuss your refinance with the car dealers, face to face. Trying to do this over the internet is not such a good idea. It is too easy to get scammed by someone. You want to see the people that you give your vital information to, and read all the paperwork before signing it. Some companies may try to hike the interest rates up higher than normal, so pay close attention to this. You can ask your present car loan representative what the interest rates are, so that you will have a good idea of what they are, just in case a company tries to hike them higher. Some will do this, probably figuring that you won’t care, because they are giving you the opportunity to refinance. You do not have to settle for this offer if you are not happy with it. That is why it is a good idea to talk to more than one car dealer; usually three quotes will give you a broader perspective.

You will, more than likely, pay a higher interest rate to refinance you car loan with bad credit, but it is still possible to get a loan to refinance if you have bad credit, so don't lose heart. Stay positive, and shop around. Having more than one opinion (or quote) never hurts either.

It is recommended to steer clear of the most popular car dealers, the ones that you see on TV advertisements the most. It is better to go to the less popular ones, smaller dealerships. If you are searching online, you can type things like “bad credit car loan refinance” and add the name of your state to that. I use the yellow pages, and find the ones that are local, as suggested above.

Hopefully, your car loan payments are current and you have made these payments on time. This is very important when refinancing a car loan if you have bad credit. Unfortunately, if your payment records are not pretty much squeaky clean, it will be difficult to find someone to refinance your car loan if you have bad credit. If you missed one or two, here and there, or if you were late, but paid by the grace period date, your credit will not show this as bad, nor will it show up on your credit report, usually, anyhow unless you had been two to three months late on payments.

In the past, when I had to refinance my car loan with bad credit, I was told that the present car that I was paying on had to be of more value than the balance that was left to pay on that loan, in order to refinance your car loan if you have bad credit. Most car dealers would like to see that at least half of your monthly income is left to pay other bills with. For example, they do not want your car loan to exceed over half of your monthly income.

Keep in mind, any questions that you may have about refinance car loans bad credit, or if you feel lost, you can call your present car loan representative and ask questions regarding how to refinance your car loan if you have bad credit.