Auto refinancing loans are a lot more common than you might think.  Since nearly a quarter of all Americans qualify as having below average credit, getting your car refinanced with bad credit is indeed quite possible. Generally speaking most bad credit auto refinancing loans fall with in the range of credit scores of 570 to 650. Above that and you don’t even need a “bad credit” auto loan as you can qualify for a normal one. And as long as your credit score is above 550 you should be able to qualify for a loan without the need of a cosigner.

Since these types of loans depend on your credit score so much, it is a good idea to first discover where your score lies. You can do this in several places but the easiest is through one of the online credit score companies.  There are many of these types of companies out there – just do a simple Google search.  Check and make sure you have no errors as those can drastically affect your credit score in a negative way.  If you do you have any disputes you can always report them but it can take up to 60 days for them to get cleared up.

You should also understand the point of an auto refinance loan before you go through with anything.  Generally the idea is to lower your interest rates and/or monthly payments.  Since you have bad credit though, the chances of getting lower interest rates is not very good unless you have improved your credit score a good deal since signing the first loan.  But either way you are quite likely to get a lower monthly payment.  You will just have to pay on your loan for more time.

Qualifying for a bad credit auto refinance loan can be a little different than just qualifying for a regular car loan.  The bank has to look at all the different factors affecting your credit score and see if lengthening the terms of your loan is a good idea for them.  Having a solid on time payment history can help a great deal.  Also if you have gone through the steps of trying to improve your credit score since the last time they looked, you may have a better shot.

If you do get turned down, you should look at some of the factors affecting your credit score and try to improve them the next time.  Remember that at least 30% of your FICO credit score is determined by the balances on your current open revolving credit lines.  So having a bunch of maxed out credit cards doesn’t help anything.  You should work to pay them off but not cancel them.  Because the more available credit you have, the better.  Also you could try finding a cosigner.  Which in itself is a difficult path sometimes.

Getting an auto loan with bad credit is a long and arduous process.  And it will depend on what your credit score is as to whether or not you will be able to even apply for one.  Typically bad credit auto loans are for those in the credit range of 570 to 670.  Above that and you qualify for prime interest rates and don’t even have to consider a bad credit auto loan.  Below that and no one will even give you a second glance without a cosigner.

Most people who are looking for an auto loan for people with bad credit have already had a previous car loan which they didn’t pay and had their vehicle repossessed or just have a weak credit score and can’t qualify for a normal car loan. Or it’s possible that you had a recent bankruptcy.  Whatever the reason you need to see what your current credit score is.  You check this at one of the several online credit reporting agencies.  As long as it’s still above 570 you probably won’t have to get a cosigner but one is always an option if you want to get a better rate.

Most banks and credit unions offer bad credit auto loan programs with competitive rates.  You will of course have to pay higher interest rates than those with good credit but such is the price you pay.  There are also many dealerships out there that offer their own loans depending on your situation.  You may have better luck with a certain dealership then with your bank.  In fact some dealerships let you get a loan without even checking credit scores.  But you can bet on paying interest rates above 20%.

In many cases just waiting until you can improve your credit will help you save thousands of dollars.  You will have a much easier time getting a auto loan with a credit score above 600 then if you go ahead and get one now with your low credit score.  Following a few simple credit repair tips can improve your credit score drastically even within a few months.  I think people forget that having a car is a privilege and not a God-given right.  Many people can get by using public transportation or carpooling for that period of time.  It can be worth it to save several thousand dollars over time.

Tips For Getting A Bad Credit Auto Loan

• You should try to be at your job for at least six months or more before you apply for a bad credit auto loan.  The longer the better. Banks tend to look favorably upon steady employment.
• You also need to have above $1800 a month in income before you can even think of getting an auto loan for those with bad credit. That is if you don’t wont to be rejected on the spot.  Over $3000 a month is generally a good average.
• Try to put down 20% if at all possible.  The reasoning for this is that your car will go down in value by 20% within the first year.  The don’t put anything down you will be at 20% upside after only the first year and you never want to be on the up side of a car loan.  Because if you have to trade in for another car you will only lose money.