Bad Credit Auto Refinancing - Get A Better Replacement of Your Loan

Everyone is dealing with credit issues. Lenders, who once financed all and sundry, have become so selective that an average credit score is not enough for them. So, a bad credit score is absolutely out of question.

Stringent lending norms and a bad credit score made you a sitting duck for dealers. But, this doesn’t mean you are stuck with high interest rates for the rest of life. The 43rd US President said that America is land of second chance. And, it surely is.

You can have your second chance by refinancing your auto loan. Remember, that your bad credit record is just a history and nothing more. There are still few lenders who are interested in giving you that second chance.

You have the opportunity of paying off your loan with a new low interest loan. A bad credit score sure compelled you to opt for higher interest rates, but things can change now. Bad credit auto refinancing can free you from the vicious circle of high interest rates - high payments. It is a simple process and has the potential to save loads of money.

The loan term is also a bit longer so that it becomes easier for you to make payments. With bad credit car loans available, you are no longer required to avail an expensive personal loan for making payments.

There is another important benefit associated with refinancing. As the new lender will need few days to process you loan, you will actually get to skip your payment. Isn’t it great?

Now, Why Are Lenders Interested In You?

Does it sound too good to be true?

Well, lenders have a reason for it. They know that you are crazy for your car and won’t let it repoed. But at the same time, it is becoming extremely difficult for you to make such high payments. They know that you just need a low-interest loan. Lenders are assured that they will not lose money if they decide to refinance you.

When Someone Is Ready To Refinance You, Why Wait?

It is a misconception that you must at least wait for a year to look for refinancing options. There is no minimum waiting period or lock in period on auto loans. You can refinance your loan anytime you want it. The earlier you do, the better it is. An auto loan is designed in such a way that your early payments are directed towards the interest amount and so your principal amount won’t reduce considerably. So there is no point in waiting, is it?

Also, a car is a depreciating asset. So if you refinance it early, there are lesser chances of an upside-down loan.

Requirements

Unlike mortgage refinancing, auto loan refinancing is less concerned with appraisals. There are no stringent inspections.

You will just have to specify the car’s year of manufacture and its mileage. Also a clean title is a condition. If you want to have a shorter loan term, the lender may even accept an eight year old car.

It doesn’t matter for the lender if you have had a bankruptcy or tax liens in past. A continuous employment with the same employer and regular payments will definitely improve your chances of approval.

Web - The Best Place

From pin to plane, internet is the best place to find everything. Use it to search for bad credit lenders. They also go by the name of sub-prime lenders. Fill in the simple application form and you will be able to generate several free car loan quotes.

Now, you must remember that you get the best deal only when you compare. A lower interest rate with a longer loan term is almost same as higher interest rate with a shorter term.

So, calculate the APR (Annual Percentage Rate). It will express the exact interest rate for a whole year instead of monthly payments and will be an effective tool for comparison. Take help of the online loan calculator to compute the exact benefit.

Once you find that flawless loan, don’t wait for long. Grab the opportunity and get going. Sign the dotted after scrutinizing the contract.

As you complete the documentation process, the new lender will pay off your loan and you will be able to make affordable monthly payments.

What Should Be Your Long Term Strategy?

Kudos to you!

You now have a low-interest loan. But don’t be satisfied with it. It is essential that you constantly work and improve your credit score. If you do so, you will be able to get that elite 0% financing.

A high credit score will solve almost all your financial problems. So, take initiatives to re-build it. Avoid unnecessary use of credit card. You must also restrict the number of needless inquiries on your credit report. Make payments on time and slowly your score will improve.

But, the immediate course of action is to hit the web and search for subprime auto lenders. Once you refinance your auto loan, you must concentrate on your credit score.

Smart car owners know that refinancing can help them in a big way, but smarter owners know the importance of credit score as well.

All the best!

How to Go About Refinancing Your Car Loan?

Refinancing your car loans is a good option to escape from the ill effects of economic recession and low paying jobs. It is easier to obtain such loans even if your credit score is in bad shape. Finding an auto loan lender offering refinancing loans is not a difficult process. There are certain criteria to be met in order to be an eligible candidate to apply such refinance a car loan.

Requirements:

It is important to meet the following requirements.

1- The value of the car must be greater than the loan amount that is applied for.

2- The car must not be greater than 5 years old.

3- The amount owed on the car must be a minimum of $7500. However, certain lenders will have varying amounts when it comes to this aspect.

Benefits of Refinancing:

If you had bought your car with bad credit rates, the credit score must have improved to a greater extent over a considerable period of time. This will have a positive impact on your credit rating. You are now eligible to refinance your car loan with low rates. You have all the rights to negotiate with the lender to reduce the interest rate. This will help you to save hundreds of dollars in the long run. You will be able to save money which can be spent for other expenditure.

What is the Process?

The first step is to take the help of internet in finding the lenders offering car loans at lower interest rates. Get the applications filled and get a quote from them. There are lots of lenders who are ready to do business with you thanks to down turn in the economy. Lenders desperately need their business to carry on. You need to give out basic information such as make and model of the car, your salary details and employment details. You must be a citizen of US and must be above 18 years of age. You have to fill out the VIN details of the automobile.

The most difficult and easy part is in selecting the right kind of vendor. You must choose the lender according to your financial requirements. The best lender can be picked up after a thorough research in the internet.

On selecting the lender, try to have direct contact with the car lenders and arrange for a meeting. Negotiate the terms and conditions so as to gain maximum benefits in the long run. Factors such as high mileage or older model will have a negative impact. You need to be careful in picking up the right deal. Make sure the vehicle shows less than 70,000 miles. Make sure you know every inch of detail about the vehicle restrictions offered by the lender.

The process is quite simple if you are thoroughly educated on this subject. Do your research works properly before approaching a lender. You can start saving money in this way by refinancing your vehicle loan.

Car Refinancing - Less Paperwork, More Savings

Are you tired of higher payments every month? Is it getting difficult to manage your auto loan? Are you desperately thinking of a way out?

You are not alone. There are many caught in the vicious web of high interest-high payment loans. But, you can change your situation by refinancing your car.

It is essential that you refinance your car loan ASAP. The reason is that loan payments are designed in such a way that most of your early payments are directed towards the interest amount. So even if you are paying your interest regularly, most of it won’t reduce your principal amount.

Risk comes from not knowing what you're doing. - Warren Buffett

I understand your doubts regarding auto loan refinance. But, you must understand that anxiety stems from unawareness. So without wasting any time, let’s understand the entire process of refinancing.

First Improve Your Credit Score

Even though there were few lenders who offered bad credit automobile refinancing in the past, the economy has taken a toll on everyone. Lenders are apprehensive and consider someone with a bad credit score as an extremely risky proposition. Hence, you must improve your credit score.

Make payments on time. Don’t apply for unnecessary loans and bring down the number of inquiries on your credit report.

Also check your credit history for any error or entries which you are unaware of.

Car’s Value

Your car depreciates every single day and so it is important that you calculate the exact value of your car. Most lenders will rely on the value expressed in Kelley Blue Book. Check the value of your car and see if you don’t have an upside-down loan. An upside-down loan means you owe more than your car’s value. If you have such a loan, then refinancing your car will be difficult.

Also, lenders want you to refinance for at least $7,500.

Ask Your Current Lender

Check if your current lender is interested in refinancing your loan. If he is ready, it is essential that you still search for other lenders who may be willing to offer competitive rates.

Apply For Refinance

Banks, financial institutions, individual lenders, etc. are few sources of auto refinance. You can search for several lenders using the web. You won’t have to go places and your work will be easier with the help of internet.

All you need to do is fill an online application form. Fill the exact same name as your current loan and also write the car loan account number. This is crucial as it will help lenders identify your loan.

You will be asked details about your car like the year of manufacture, accident history, etc. The lender will also be interested in your financial stability. Other than your credit score, your monthly income and current debts are also important factors.

Once you are approved by a lender, verify that the new loan amount is lower than the resale value of your car. This will be beneficial if you decide to sell your car and pay off the loan.

Don’t compare the loan on a single parameter of lower interest rate. It must have a lower APR too.

It will be excellent if you get a loan at lower interest rates and without extending your loan term. It doesn’t make sense in lowering your monthly payments and extending your loan period. It will only increase the risk of upside-down loan.

Fees Associated With the Refinance Agreement

Every lender has different rules and so the fees charged by them also vary.

There may be some lenders who will not charge any transaction fees. So, you only have to pay the usual Transfer of Lien Holder Fees or the Title Transfer Fees ($5-$10) and the State Re-Registration Fees ($5-$75). These fees are usually added to the principal amount.

Also check for any pre-payment penalty. Your current lender may impose a penalty or charge a fee for paying off the loan early. If the penalty amount is huge, you must think over your decision.

Skip A Payment?

This is a surprise benefit. Your new lender will take some time to process everything, so during that period you may get to skip a payment.

But to skip it, you must receive a welcome/agreement letter from the new lender. It is essential that you ask for permission to skip a payment. If he denies it, make sure you make the payment on time. Don’t worry about your payment getting lost amidst all this; it will be applied to your refinanced loan only.

Complete the Documentation

Don’t worry about the huge paperwork associated with refinancing. There are only a few documents required while refinancing your car.

Contract

Your contract will include all the terms and conditions of the new loan. Ensure that all the promises made by the lender are fulfilled in the agreement. Read the fine print and understand every term. If you are confused about rates and percentages, use online tools and calculators.

Payoff Letter

When you refinance, the title of the car is transferred to the new lender. You will have to instruct the old lender to send it to the new lender.

Registration and Title Documents

After refinancing your car, you will have to re-register it with the DMV. So, sign all those documents related to registration and title transfer.

Proof of Insurance

Lenders will demand a copy of your car insurance to verify that you have sufficient insurance on your vehicle.

Proof of Income

Your proof of income will ensure the lender of your affordability and ability to make regular monthly payments. You can submit your recent pay stub as a proof.

Proof of Address

Lenders want to know your house address, so that they can contact you anytime they want. Usually a copy of your driving license will be enough but you can also use a copy of your rent receipt as proof.

Authorization To Validate Employment Details

The lender may be interested in verifying your employment details with your boss and seek authorization for the same. So, you will have to sign an authorization letter for the lender.

The documentation process won’t take much of your time. An hour or so and you will have a refinanced car loan. Lower monthly payments will then be reality for you.

This brings us to the end. I hope this article helped you understand the intricacies of the refinance process.

So, refinance your loan and drive your car with ease.

RapidCarLoans.Net provides online car loans at affordable rates. If you are unhappy with your loan, apply for car refinancing. Avail instant quotes and get your car refinanced in no time.

Happy Saving!!!