Many people with bad credit wonder if they can refinance a car loan. Auto loan interest rates are low, and funds for auto loans seem to be plentiful. People with a bad credit score may be able to lower their loan payments or lower their interest rates by refinancing now. Our experts at RateWorks want to offer some things to consider when refinancing an auto loan with bad credit.
What credit rating is considered bad credit or poor credit?
The requirements for minimum credit scores vary by lender. Auto lenders have different requirements than some other financial institutions. The good news is there is a possibility of auto refinancing with bad credit. Some lenders work with clients who have had credit problems to obtain an auto loan, while others work with clients who have had previous bankruptcies or repossessions. Each person should find the best lender for their situation when searching for an auto loan. Credit score requirements are not the only consideration when evaluating a monthly payment, but it plays a role. Credit score and credit history should be carefully reviewed before starting the refinancing process.
Where are credit scores available?
There are numerous sites available to get a free credit score. Many also offer advice on ways to improve credit. Credit reporting agencies like Transunion, Equifax, and Experian offer one free credit report per year. You can get these reports at Annual Credit Report. The credit score on each should be very close, if not the same. A significant difference in the score from one credit reporting agency when compared to another could indicate an error. Other companies offer free credit scores, monitoring, and reporting. Some companies may require memberships in certain programs. Watch for scams in this area. Many companies offer to help you check, monitor, or repair your credit history, but not all of these companies are reputable. Every individual should be sure to carefully review their report and question any items that may be inaccurate. These sites have information on how to file a complaint.
Credit reporting agencies like Transunion, Equifax, and Experian offer one free credit report per year. The credit score on each should be very close, if not the same.
What auto loan refinance options are available with a low credit score?
Refinancing a car with bad credit–even below 550–may be possible in the following situations:
- If you have a higher credit score than it was at the time of the original loan
- You have had a steady payment history on the old accounts
- There is bankruptcy or repossession on your credit report
- You are trying to work with a company specializing in that type of auto refinance loans
What to watch for in an auto loan refinance
Check for these charges to know what fees might occur when refinancing an auto loan:
- Early Termination Fee on your current auto loan
- Transaction Fees from the current lender and new lenders
- Registration Fee Potential State fee
- Title Transfer Fee Potential State fee
Contact the specialists at RateWorks to find the best auto loan refinancing option. They consider the individual. They evaluate the existing loan, loan qualifications, vehicle, and the monthly budget. They don’t use third-party lenders–all financing is in-house. Get a Free Quote, email at firstname.lastname@example.org, or call our friendly customer service representatives at 855-925-1647.