Bad Credit - Refinance

Bad Credit Refinance
Poor Credit Refinance

Refinancing means that a new loan issued to take the place of an older loan or mortgage. The new loan merely pays off the old loan the borrower still has to pay the loan off in a refinancing.

The main reason why people refinance loans and mortgages is to get a better interest rate. Loans or mortgages issued years ago may have higher interest rates than the ones charged today. Some individuals may also want to change the terms of a loan or mortgage to lock in a better interest rate.

People with poor credit should be able to refinance their loans and mortgages if they are willing to shop around. There are many lenders that make refinancing available to people with bad credit. A good place to locate these lenders is online.

Requirements for refinancing

The main requirements for refinancing will be a good history of paying off your loan and a verifiable source of income. Individuals with poor credit who have documentation of their income and a record of paying off their loans and mortgages should be able to qualify for refinancing.

One low hassle way to get refinancing is to simply ask the lender you are working with now for refinancing. If you have a good history of paying off your loan, that lender may want to keep your business so they might offer you refinancing. An advantage to checking with an existing lender is that that lender may not require a credit report.

Online refinancing with poor credit

The best place for people with bad credit to search for refinancing is the web, most of the major lenders work directly with borrowers on line. Many other lenders also offer loans online and they are always looking for new business.

Spend several days looking for refinancing online before committing to a lender. Carefully examine every loan offer and pay attention to the fine print before you commit to a loan. Make sure that the interest rate that they’re offering is legitimate and won’t change in the future.

Don’t make a poor credit rating worse

Applying for refinancing can make your poor credit rating worse if you do it the wrong way. Running a credit report can cause your credit score to go down. If several lenders run your credit report you can see your poor credit turn to bad credit.

There are some ways to prevent this from happening. The best is to run your credit report yourself and submit a copy of it with loan applications. This way you can give lenders your credit history without affecting your credit score.

Another is to seek out lenders that don’t run credit reports. Some lenders will forgo a credit report if a borrower agrees to a higher interest rate or stricter terms. Agreeing to make a large down payment can also get a lender to drop the credit report requirement.