• Poor Credit Car Finance: How to Refinance a Used Car on Bad Credit

    If you are looking for poor credit car finance, it may not be easy, but it is possible. For many, the poor economy has not only translated into financial difficulties, but may have also reduced your credit score making things even more difficult. You may no longer have the money you did before to keep up with your bills and may have even fallen behind on your car loan. By reducing your payments, a refinance auto loan may be the best way to get back on your feet. Although refinancing options for your car loan may extend your loan a year or two, it will lower your payments and make it easier to catch up and stay caught up. Believe it or not, you may be able to refinance a used car on bad credit. Here’s how.

    1. Speak with Your Current Lender

    Refinancing your current car loan may be a simple as speaking with your current lender. In many cases, your current lender can refinance your loan and adjust it for not only a lower payment and interest rate, but may even help you catch up on any payment(s) you are behind. If your lender can not help you with refinancing, all is not lost. There are other options available to you.

    2. Find out what You Owe

    The next step is to ask your current lender how much is owed on the principle for the loan, or how much it is to pay off your loan. This will give you an idea of how much you need to refinance.

    3. Find out your Credit Score

    Many people feel their credit score is actually lower than it is. Learning your actual credit score will make obtaining a loan at fair market value much easier to do. You may not need to look for a bad credit refinance after all.

    4. Locate a Lender

    The next step is to locate a lender that specializes in bad credit loans. A search on the Internet should give you several to choose from. Lenders who specialize in poor credit loans often have more options available for you to choose from. Start with a website that searches from many different lenders on your behalf. Fill in the amount you owe on the vehicle, year, make, model of car, and your income information on the search tool and allow it to match you with several lenders. This simple form is usually sent to several lenders at once who will later contact you with any offers.

    5. Compare Offers

    Once you have several offers available to you, choose the one that best fits your individual needs. The best refinance terms may be simply extending your loan. Since you owe less than you did originally, even keeping the same interest rate over a slightly longer time should lower your monthly payments.

    6. Fill out Paperwork

    Once you have decided which finance company to go with, finish filling out the application and transfer your loan. Your new finance company will pay off your old loan and you will begin paying your lower payments to the new company.