Bad Credit Auto Refinance

Can I do an auto refinance with poor credit?

Do you have poor credit?
Usually if you have a credit score under 650, then you are going to have problems getting access to credit because your credit history is spotty. Maybe you have outstanding debts to pay. Maybe you forgot about a line of credit and you are past due or have missed several mortage payments. Perhaps you had severe credit problems and had to file for bankruptcy.

Does this mean that I can't refinance my car loan?
The short answer is no - you can approved for a refinance. Often times, people with less than perfect credit are the best candidates for auto loan refinance.

Why would I get approved if I have bad credit?
When you purchased and financed your vehicle, you were likely offered a high interest rate, above 10%. You may have accepted a high-interest loan in the past because of a bad credit history. However, if you have maintained a stable job with verifiable income since you bought the car, and have made consistent payments on that loan for over 1 year or more, then you could get approved.

I've been a "good pay" for a year - will the bank care?
Banks will conclude that since you've made steady payments on the loan (and on your other credit accounts) that your ability to continue to pay on the loan is quite high. Therefore, the risk associated with your loan, as reflected in your current high interest rate, is not taking into account your recent strong history of making payments.

Should I apply?
That is the real question. If you fall into the category of "good payer", then you have a very good chance to be approved for a auto loan refinance. As such you will have an opportunity to get a substantially lower your interest rate. There is no cost to apply and no obligation to take a loan. It is worth your while to apply to a couple of lenders to see if you can cut your rate and lower your payments.