Can I Refinance a Car Loan with Bad Credit?

By Angela Monroe - December 3, 2018

Refinancing your car loan can be a stressful process – weighing up the best options for you and how you can benefit financially in the long term. If you have bad credit, car loan refinance can get even more tricky, and you’ll want to ask for expert help to ensure you make the right decision for you.

At Loans for People with Bad Credit, we are on hold to help you refinance a car loan with bad credit. By finding the right lenders who specialise in working with people who have bad credit and by helping you to figure out what’s the right car loan refinance option for you, we can help to save you time, money and a huge amount of unnecessary stress.

Find out how we can help you with bad credit car loan refinancing.

Understanding bad credit

There may be many reasons behind your bad credit but it’s useful to understand exactly what caused your bad credit and whether you can improve it in any way before you decide to refinance a car loan.

Here are a few reasons why you may have bad credit:

  • Previous unpaid loans or
  • Missed or late repayments
  • Multiple rejected applications for credit
  • History of bankruptcy
  • No credit rating due to age or lack of credit use

Refinancing a car loan with bad credit

Inevitably, refinancing a car loan with bad credit is more difficult than if you have a perfect credit rating – but it’s not impossible and there are lots of options out there for you.

The good thing is that if you have been approved a car loan in the past, you may have improved your credit score. It’s really important that you’ve kept up to date with payments and made payments in full and on time. If this is the case, your lender may consider car loan refinance with a better rate of interest and better terms.

Things to watch out for when you refinance

You need to be aware that if you’re refinancing a car loan with bad credit, you may have to accept that you will be asked to pay slightly increased rates of interest and you may not get the most flexible loan terms available. This is due to you being viewed as a higher risk by the lender who is wary about the having the loan paid back in full by the date agreed.

You shouldn’t agree to car loan refinance if you feel that the terms are completely unfair. Top things to look out for include:

  • Extremely high interest rates
  • Very high early repayment or exit fees
  • Shortened loan terms

Getting the lowest rates possible when you refinance a car loan

There are a few things you can do easily and efficiently to get some real reductions in the cost of refinancing your car loan. These include:

1. Check your credit score

If there are errors in your credit report, you can request that these are erased or corrected to improve your score and get a better rate when you refinance a car loan. You can also see why your credit rating is bad and discuss this with the lender.

2. Find the right lender

At Loans for People with Bad Credit, we work with a range of lenders who work specifically with people who have bad credit. This means that they may be more understanding of your poor credit history and unlike many of the larger banks or lending institutions, they will be willing to help you refinance a car loan with better terms.

3. Shop around

This is something we can help you do. Our access to lenders makes it quick and easy for us to find a car loan refinance option for you and to save you time, money and a huge amount of stress. Always get a number of car loan refinance quotes so that you can compare them and decide which one suits your needs.

Managing your money with bad credit

If you have bad credit, it’s important that you act on a daily basis to improve your credit rating and increase your credit score. Always act responsibly and never borrow more money than you can afford to pay back.

If you refinance a car loan with bad credit, you’ll be getting the chance to prove that you are a responsible borrower – set a reminder or set up a direct debit to ensure that monthly repayments are always paid in full and on time to your lender to start building up evidence of your financial stability.

Be organised. This is really important as you don’t want a lack of organisation lead to missed or late repayments. You need to ensure that you do everything you can to keep improving your credit.

Ask for expert help. We have years of experience helping people with bad credit and we want to make sure that you find the right solutions for your financial circumstances.

Contact us today so we can start the car loan refinance process with you.

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.

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