There are some factors that go into whether or not you will be able to reduce your car payment with bad credit. Before attempting to make that monthly amount less, you want to know what can affect your chances.
Consider the Present Market Climate
If the economy has come to a stall and business is slow, there are some tremendous benefits. Lenders will be more willing to work with you and help you lower your monthly payments on your installment loans. Remember: if their starving for business, any client will do, even if your credit is in dire conditions.
Take advantage of this. If the economy is booming, lenders will not be starving for business and have more options. Thus, they will not be as willing to help you get low car payments with bad credit if your credit presents a risk of default. Take into account the market before you try to lessen your monthly car loan payment. What’s interesting is that you will have better luck in tough times to lower your auto loan payment and qualify for bad credit loans.
Consider What’s Going on with Your Current Loan
How can I lower my car payment if I am struggling to make the payments?
Ask yourself if the chances of defaulting on your car loan are high. If so, you have a better chance of being able to lower your car payment with a loan adjustment to help ease the burden. Why? It is simple. If you default, your lender will end up losing money on the deal. Thus, if a default is impending, a lender will help you refinance or extend the loan to help you avoid losing the car as well as make sure they do not lose out on the loan. Refinancing to make owning a car less stressful is a good option.
It is all about the dollars. Why is low car payments with bad credit a good deal for the lender? The catch is that you are usually given a longer loan time and higher interest rates; your monthly payment may be lower, but you will end up paying much more in the long run. How to lower my car payment and not pay more for my car, in the long term, will take a bit of planning.
Refinance My Car Loan To Lower My Payments
Generally speaking, you can refinance bad credit loans if you currently have at least $7,000 to $8,000 left on the loan. This can vary according to the type of car and dealership. Moreover, lenders also like to see that the vehicle has not exceeded 80,000 miles. This mileage limit ensures that the car is still in good shape. The loan amount minimum ensures the lender has the motivation to help you with a new bad credit loan.
Can I Get Cash Back and Have a Lower Car Payment?
Yes. If you have enough equity in your car, we can offer you a real life example of getting the equity out of your car in cash and get a lower monthly payment. This example is found in our page for refinancing your car to pay for a lawyer retainer fee or other legal fees. This example works well for any unexpected bills or expenses you need cash for.
Lengthen Your Borrowing Period
There are several methods you can use here to lower your car payment. You probably just wish you could wave a magic wand and say goodbye to the loan balance. It is too bad that you cannot, so you are stuck with realistic methods. Furthermore, the good news is that, even with poor credit, you have options. The most popular option for bad credit borrowers is to extend or refinance your bad credit loans.
Like anything dealing with loans, trying to lower your car payment through a refinance has its pros and cons. The good thing is that a loan adjustment can help with car payments by lowering your car payment each month and make your financial life easier. You just pay over a longer period. This can help bring up your credit score, make it easier to get a loan for other things and decrease overall stress in your life.
Refinance My Car Loan to Lower Payments
This could save you thousands of dollars if you have managed to keep up on your car payments from the time your loan began until now. Perhaps when you purchased your car your financial situation was not as good. Now you need to know how to lower a car payment. Either way, you should be able to get a new deal from your lender or another lender. You will have a better opportunity if your credit has improved recently. Get a free online credit check.
If you know your credit score, you can use tools like a car payment calculator to view an estimate of your payments after refinancing. Often, a second financial institution will offer a slightly lower interest rate than the first lender to get more business. The only way to see if you can get a better interest rate is to apply for auto loan refinancing at some lending institutions and compare the rates. If a bank or credit union has not been receiving a considerable amount of refinance applications from bad credit borrowers, your chances of getting a new loan and being able to lower your car payment will be even higher.
Consider a Lease
If extending your existing loan or refinancing it is not an option or proves too difficult, you still have other options. It is not the time to cash in your chips just yet. Try one of these simple ways to lower a car payment. The good thing about a lease is that it usually entails a lower monthly amount than a refinanced loan. You typically only pay about half of the value of the car over a specific period of time. Low down payment car dealers offer leases to those with bad credit. The bad thing is that you have to return the car and are left without any equity once the lease expires or you can purchase the leased car after the term is up, but you will have to get financing or buy it outright.
Can Refinancing My Car Hurt My Credit Score?
That depends. To apply for a loan, your lender will do a credit check that will be a hard pull on your credit report. This usually lowers your score by five points. After two years that penalty will drop off your report. Five points are not much sacrifice if you are going to drop a couple of points on your interest rate. The money you save will be a good trade.
There are tons of lending institutions in local areas as well as online agencies that will provide low car payments with bad credit refinancing. The great thing about online lenders is that you can apply for free and see the new loan before you accept or decline. Before you decide on a loan, compare at least five different lenders who offer online loans and see which new loan is the best for you. You can go online and to credit unions and banks. Consider how much you will pay over the course of your loan and what monthly amount suits your budget best. You want to be able to make payments, but you also don’t want to be paying off the car for what seems like forever.
How To Get A Lower Car Payment On Your Lease
If you are currently leasing a car, getting a mile limit can help cut down the monthly payment. Dealerships do this because it makes certain the car has a higher resale value once returned.
Sell Your Car
This is difficult. You want to talk to the lender first. Moreover, you need a buyer that trusts you. There are a lot more ins and outs, but it is possible. For example, the buyer can pay off your loan balance and give you the remaining amount on the deal. Your lending institution then can send the title to the buyer’s lending bank or the buyer if there is no loan involved.
We know that everybody’s credit situation is different. The market is always in fluctuation. There are lots of factors that can influence low car payments with bad credit. It is vital that you take into account your current situation and the feasibility of extending your loan or refinancing. Make sure to consider the benefits as well as the negatives. Knowing “How can I lower my car payment if I have bad credit” without long term consequences is the key to financial recovery. You can also see our many useful “How to” subjects that we have listed that any car owner should read to save money and get you out of trouble with your car.