Refinancing A Car With Poor Credit or Bad Credit

When a person wants to refinance his auto loan, itís usually because he needs to lower his monthly payment. Obtaining such a refinance isnít a problem when one has good credit. What about when someone is trying refinancing a car with poor credit? Credit-yogi.com will supply some answers to how to go about accomplishing this, including:

ē Contact Original Lender

ē Maintain a Strong History

ē Choose a Sub-Prime Lender

ē Compare Rates

Talk to the Original Lender

Before looking into how to refinance an auto loan with poor credit, make sure to contact the lender that drew up the first loan on the vehicle. One must know the total loan balance before one can get the loan refinanced. Having this information also makes it easier for a lender to work out the details of the new loan. One can call the original lender and talk to a customer representative or check his most recent loan statement to find out the loan balance.

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Make Regular Payments

In order to facilitate refinancing a car loan with poor credit, a person has to have a good payment history with his lender. If there are lots of late or missed payments, it becomes less likely that a refinance will be possible with this lender. Of course, someone can always look to other financers, but itís always best to start with the lender heís been working with all along, as this lender knows him better than a new one would.

Look into Sub-Prime Financers

Sub-prime lenders specialize in helping folks refinance an auto loan with poor credit. If a person is in this boat, he wants to avoid prime lenders. A sub-prime financer can access different kinds of loans for those whose credit is less-than-awesome. Sub-prime lenders also try to get reasonable interest rates for their credit-challenged clients, whereas prime lenders sometimes raise them as a form of ďpunishmentĒ for having poor credit.

Compare Interest Rates

Honestly, itís tougher for a person who has poor credit to get a refinance loan that has an acceptable interest rate. The world of financing has this idea that those who've had credit crashes should be charged exorbitant interest rates on any loan. When refinancing a car with poor credit, be sure to research the interest rates of several sub-prime lenders to get the very best one for oneís situation. A savings of even .5% can mean big bucks one does not have to pay for the refinance, so take the time to find the most reasonable rate.

Refinancing A Car With Poor Credit or Bad Credit - http://www.credit-yogi.com/automobile-debt/auto-refinance.php

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