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Refinance an Auto Loan

It can be very difficult to refinance an auto loan in the best of times and nearly impossible to refinance an auto loan when your credit is bad.

It is possible to refinance an auto loan with bad credit it's possible but it is often much harder than it should be. Lenders will be willing to refinance auto loans for people with bad credit in certain situations. Unfortunately people with bad credit will have work harder and look longer to get auto loans refinanced.

The main thing that borrowers with bad credit should remember is that it doesn’t hurt to ask. Refinancing means that a new loan with a different interest rate is issued. This loan pays off the existing loan and it can save the borrower money.

Call Your Lender First

The first place a person who trying to refinance an auto loan with bad credit should look is to their existing lender. Call the lender and ask what refinancing options are available for you.

A person with bad credit but a history of making their car payments on time might be able to work out some sort of deal with their lender. One advantage to working with an existing lender is that they may not run a new credit report for the refinancing which can hurt your credit.

One way to increase your chances being able to refinance an auto loan is to pay some car payments early. This can show the mortgage holder that you have the income for refinancing.

Shop around When You want to Refinance an Auto Loan

You should shop around when you’re looking to refinance an auto loan. A good place to do this is to go online and visit a number of websites to see what they are offering.

When you do shop around for refinancing, try not to fill out too many applications. When an application is filled out the lender often runs a credit check. Running credit checks can cause your credit score to fall and hurt your chances of getting a mortgage.

Instead talk to the lenders directly, describe your situation and ask what they can do for you. They should be willing to give you a quote or rough estimate without running a credit check.

Know What You Owe

Before trying to refinance an auto loan a person should check and see what they actually owe on the auto loan. This can be easily done by visiting the lender’s website. Look closely at what you owe and how many payments are left. It might be easier and cheaper simply to pay off the existing loan than to take out a new one.

Once you know what you owe you’ll know how much to ask for. This will make it easier and faster to refinance an auto loan.

 Another good idea is to find out how much the car is worth. The lender will base the amount they extend on the value of the car. Make sure you will be able to borrow what you need against your car before trying to refinance an auto loan.