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Bad Credit Auto Loans

How to find a bad credit auto loan and how to refinance it

Finding an auto loan is not an easy job; it is even more difficult for people with poor credit. Auto loan companies often consider the customer’s credit as a determining factor for processing an auto loan application. Therefore, if your credit rating is not good, then it won’t be too easy for you to find conventional lenders that offer bad credit auto loans. They require the borrowers to improve their credit first and then apply for the loan. However, improving credit is a lengthy and complicated process. It can’t be done overnight. Have no worry; in spite of poor credit you’re eligible to find a bad credit auto loan. There are some financial institutions that specialize in bad credit auto loans; they offer such loans to any borrower, irrespective of credit rating. Nevertheless, such loans often come with higher interest rates.

Tips to getting bad credit auto loans

If your credit rating is poor, getting a bad credit auto loan may not be easy, but not impossible. There are a number of online lenders that provide auto loans to the customers with financial issues as well as poor credit. It is true that such lenders generally charge high interest rates, but following some easy tips you can be eligible to get a low interest car loan with bad credit. Here are the tips.

  • Review your credit – This is the first step that you have to go through in order get bad credit auto loans. Get the free copies of your credit report from chief credit reporting agencies like TransUnion, Experian and Equifax. Check the copies well to detect the discrepancies; and if there is any discrepancy, promptly report it to the concerning authorities for correction. Credit agencies are prone to making errors in credit reports. Thereby, you must check your credit report once in every year. Check whether or not the agencies have put all the data including dates and amounts correctly. Remember, erroneous report often has bad impact on a person’s credit. Therefore, you must keep your credit report error free. You have every right to dispute an erroneous credit report. To file a dispute you need to fill out a dispute form that you will get on the official websites of all of these 3 credit bureaus.

  • Apply for the loan – Once the credit agencies rectify the mistakes in your credit report, you can apply for the car loan. However, don’t apply before you get your copies of error-free credit report in hand. Your chance for getting a car loan with better interest rates increases with every bad element that gets eliminated from your credit report. Shop around for bad credit auto loans; start off with local banks or community credit unions which you already have relationship with.

  • Apply to alternate lenders – If you’re as well as your loan application is declined by the bank or credit union, you must apply to other lenders at the earliest possible. It is true that credit applications lessen your FICO score, but credit-inquiries done within the same month for similar loan type are considered as a single credit inquiry. However, if you’re refused by the lenders even this time, you may apply for the loan through the auto dealer. Auto dealers generally provide loan to any customer, regardless of his credit; but they charge much higher interest rates than conventional auto loan providers. They do so to make extra profit.

Steps to refinance your bad credit auto loan

Bad credit auto loans often come with higher interest rates and unsuitable terms and conditions. Therefore, if you want to get rid of the burden of overpaying, you can certainly look for the options of refinancing your car loan. By refinancing existing high interest auto loan, you can lower the interest rates and keep yourself from paying a fortune as interests. Fortunately, there are available options of refinancing auto loans with bad credit. Here are the steps to refinancing an existing bad credit car loan with higher interest rate.

  • Contact your lender – Contact the lender and ask him about the existing loan balance. Unless you know the loan balance, you can’t refinance bad credit auto loans. You can also find the information on your latest loan statement.

  • Determine the cost of your car – Now determine how much the car is actually worth. Unless the amount is more than your loan amount, you can’t apply for a car loan refinancing. You can make use of Internet to determine the value of the used car.

  • Keep good payment history – You must maintain good payment history in order to refinance your existing auto loan for bad credit. Refinancing a car, which is subject to late payments, is almost impossible. Auto lenders generally don’t approve refinance applications from the car owners with bad payment history.

  • Find sub-prime lender – Being a bad credit holder, you should avoid dealing with prime loan providers. It would be better for you to work with sub-prime as well as high-risk loan providers. These lenders especially deal with bad credit auto loans and bad credit loan refinances. Moreover, such lenders have access to several low interest car loan options. However, you must shop around and compare quotes before you make the final decision. It would help you find the best auto loan refinancing option that provides maximum coverage for minimum cost.

Bad credit auto loans are difficult to find, but not unachievable. You can surely get a legitimate lender to offer you car loan in spite of your poor credit.

For low interest bad credit auto loans, you can surely opt for us. We would be happy to offer car loans to any car owner, irrespective of credit rating.

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