By choosing to refinance your current bad credit loan, you can reduce the cost of monthly expenditures. When you first financed your car, you may have taken a loan from the car dealer. Your credit at that time may not have been superb, and you took what was offered to you.
Some lenders specialize in bad credit car loans and have competitive rates for those who shop around. Most people with bad auto loans did not shop around for the best loan possible. When bad credit applicants originally financed their car, they consented to a very high-interest rate.
They simply didn’t know there are better deals out there.
The provider charges more to offset the risk associated with the high risk auto loans. Car loans with no credit checks are notorious for high-interest rates. However, with consistent payments made over time, your credit score will have improved. Then it is possible to negotiate a lower interest for their bad credit, car refinancing or loan modification.
It is easier to find an auto loan lender willing to offer you a vehicle refinance (rather than a new purchase) even if you had a no credit check auto loan.
With many lenders charging interest rates of 20% APR and above, merely reducing this by a few percentage points could mean the savings of thousands of dollars over the course of the loan. In this way, car refinancing online is a magnificent idea, according to the FDIC.
Have you walked into your local bank and told the loan officer: I want to refinance my car with bad credit? We are sure their response was not too encouraging.
Many local banks prefer the exceptional credit clients rather than those looking for bad credit loans.
We have a much different attitude. By partnering with institutions and dealers all over the United States, we can provide auto refinance for poor credit customers. We also provide financing with better rates that the local bank or credit union.
You Want Equity From Your Car
“Equity” refers to the difference in how much your original loan amount was and how much the underlying asset is worth. For example, if your car is worth $7,000, but you have a $5,000 loan on it, you have $2,000 worth of equity in the car.
Equity also means ownership. It is the amount of the car that you own yourself, as opposed to the amount that the bank or lender technically owns.
Refinancing a car with poor credit can turn that equity into actual cash. Because a refinance is a brand new loan, that replaces the old one, the refinance process can give you your capital as one big check.
When you submit an application and get a new auto loan from a car, refinance company. They pay off your old loan and extend you a new loan that covers the remaining value of the car. If there is a difference in the size of the old loan and the new loan due to the owners having equity in the car. The auto refinance company can give you the money.
Sell Your Truck or Refinance?
When you first picked out your truck, it was exactly what you wanted. It gave you the ability to move cargo and pull stuff that you could not do with a car or SUV. It has a great look, and the interior is very plush and roomy, but it came with a high price tag. Now you are struggling to make the payments and it looks as if you will need to sell your truck. Before you do anything so drastic, let’s look at a few facts below:
- When you signed the loan papers in the dealers office, you probably didn’t shop around for a good loan rate because you were in a hurry to get your truck.
- You also didn’t do any maintenance on your credit score first before you applied.
- Also, you probably tried to get out with as smallest of a down payment as possible.
Three of the biggest mistakes you can make.
However, don’t feel sorry, most people make these same mistakes, and this is how you get stuck in a bad auto loan. We can help you undo these mistakes with a truck loan refinance, and you will not have to sell your truck.
We can show you how to repair your credit score easily. We can also review your refinance application with many lenders to find the best rate for your credit. Then you will have time to analyze the new loan and decide if it fits your needs. Also, you can lower your payments drastically by adding a larger down payment. This can cut your current truck loan down to payments you can live with.
What about a car lease?
Rent to own programs have a few drawbacks of their own. They have a big down payment. You build no equity in the car because you do not own the car while you are paying for it. Also, after you sign the papers, you cannot refinance like you can with a standard car loan.
You Want a Better Credit Score
Even if you are managing to make your existing loan payments on your current budget, car refinance companies can still be of help to you. If the loan payments are large enough to be burdensome, and you fear that you might need to make a late payment or miss a payment, you might want to refinance your auto loan to protect your credit.
Refinancing a car loan with bad credit to obtain a lower monthly payment makes it easier for you to be sure you will always make the payments every month.
Making payments every month improves your credit score. Any other time you need your credit scores, such as taking out a home loan or other type of loan, you will be able to obtain a better interest rate. If you have mistakes on your report, call the bureaus and resolve the problem by removing incorrect items on the report. To fix charge-offs and other negatives on your credit, you should call your creditors and work on a payment plan. All this should be looked into before you apply for a refinance loan.
Refinancing After Bankruptcy
Valley Auto Loans believes that you can turn your financial history around through a car loan after bankruptcy. There are many ways to buy a car these days, so it is best if you use everything available to get the best deal. Agreeing to a high-interest rate loan, when choosing bankruptcy refinance loans, will not be your downfall. Pay the loan as you research for the best auto refinance companies that will offer a better deal. There are refinance companies including Valley Auto Loans, that will refinance your auto loan with bankruptcy history, They provide a fair and competitive interest rate. We feel that you deserve to rebuild your credit with a reasonable interest rate!
We have a blog to help you understand auto industry trends, including a FAQs section to highlight all your potential questions. The quote process is entirely free of any obligation to purchase. Valley Auto Loans can answer all your questions to get your monthly payment changed to a reasonable amount by refinancing your car loan after bankruptcy.
Length of Refinance Loans
If your instinct is to look solely at how a new investment affects your monthly payments. Here are some of the other things to consider when deciding on if a refinance will ultimately help or hurt you.
- The Length of The Loan: Are you trading a five-year loan for a ten? Though this is going to drop your monthly payment, it will add to the amount of interest you pay. It will lock you into debt for a longer period. A longer loan also doesn’t make sense if you have a short time, say two years or less, before your loan is paid off.
- The Interest Rate: Never take a jump in interest if you have a choice. It makes no sense, particularly if that jump is high.
- The Type of Loan: Seem to good to be true? It probably is. Read the fine print and look for “interest only” for the first term or a balloon payment due at the end. Both of these will cause potentially devastating amounts owed later on.
If a refinance provides the borrower a lower interest rate and doesn’t add more than a year or two to the payment schedule, then this is a good deal. It will also work more quickly to improve your credit score, as the monthly minimum owed will go way down.
The Age of the Vehicle
When refinancing a car that you’ve been paying off for some time, the collateral value of the car will change. Not all lenders will provide a loan for a car older than ten years. Some will also raise the interest rate on a car older than seven years.
This does not mean it is impossible to refinance an older car, but it does take more work to find the right loan. If the car was new when you first bought it, this is likely not an issue. However, if you bought an older used car, you probably won’t get as low a rate.
Pay The Car Refinance Company Early
If you do not, always pay on time. Budget yourself for an early deadline, say two weeks early. Then being five days late will still mean you are early. Depending on the structure of your loan, this can even save you some interest paid over time.
Set up Automatic Payments
This means the money gets paid first, from your account, especially if you schedule it to be withdrawn on payday. Some loans give the option to pay every two weeks instead of monthly, which results in an extra payment once a year.
Refinance Car with Bad Credit to Improve Your Budget
Another reason it is prudent to refinance your car with bad credit is the positive impact it can have on your credit score. Often, the amount paid monthly for a car may not fit into the current budget. In this case, a longer duration refinancing plan could help. This can help drastically improve one’s credit score and reduce the risk of repossession. When refinancing for credit reasons, be sure to find an interest rate that is lower than current finance rates.
We have also included these loan amounts and terms for your reference in regards to a bad credit auto loan.
||Up to 84 Months
||Up to 72 Months
||Up to 66 Months