An auto loan refinance can extend your current loan term to lower your payment, or help you acquire a reduced interest rate, which may also decrease your monthly obligation. It's easier to refinance with a high credit rating. But even if you have a low rating, it's possible to refinance. The key is maintaining a good relationship with your present lender.
Check the current value of your car. Research your car's value at www.kbb.com (Kelly Blue book), and then contact your present lender and inquire about your pay-off amount.
Consider a down payment. Auto lenders will not refinance an upside-down auto loan (which occurs when you owe more than the car's worth). If possible, save money for a down payment to reduce the auto loan balance and qualify for a refinance.
Add a co-signer. Include a joint applicant or co-signer on your refinance application to help you qualify for a new loan with bad credit. Pick someone with a good credit history.
Make copies of personal finance statements. Demonstrate your ability to pay an auto loan by showing copies of your paycheck stubs or tax returns.
Consider refinancing with your present auto lender. If you've always paid your auto loan on time, your lender will likely consider you for a refinance, in spite of your shaky relationship with your other creditors.
Check into other subprime auto loans. Obtain a free loan quote from other lenders who offer bad credit refinances. Compare rates and terms to get the best finance package.
