Bad Credit Auto Loan Refinance - Tips To Increase Your Odds Of Getting Approved
Written by: Carrie Reeder
Plan to refinance your auto loan but have bad credit? You can
still find financing at reasonable rates by searching online for
your lenders. Researching rates and terms will lead you to a
good deal, saving you money each month. Increase your odds of
getting approved for the best loans by following these tips.
Think About A Co-Signer
The better your credit score, the better your rates. So if you
don't have great credit, look for someone who does. By having
them co-sign for your loan, you can find yourself qualifying for
much better rates. Lenders look at your co-signers record, but
you pay for the loan.
If you are a couple, you may also choose to use the person with
the best credit score to apply for the refinance auto loan. You
can find out who has the better record by requesting your credit
score online.
Update Your Credit Report
While you can't change your credit report overnight, you can be
sure it is in the best condition possible. Take a few minutes to
review your free copy and make sure all information has been
updated. You may also want to include an open letter explaining
any reasons for your bad credit score. Mitigating factors, such
as a job loss or illness, are sometimes considered by lenders.
Eliminate Old Debt, Hold Onto Cash Assets
Besides your payment history, lenders also look at your debt and
cash assets when considering your loan application. The less
debt you have, the better you look to lenders - especially if
you have a high income.
Cash assets are also important. Lenders like to see at least six
months of cash reserves in the bank. This can mean a savings
account, money market, or CD.
Be Honest With Your Information
More than likely, you will be approved for refinancing. What
rates you qualify for depends on your information. So to get the
most accurate loan estimate, be honest about your credit
background. That way, when you actually apply for the loan, you
will be approved for the rate quoted.
Remember too that not all lenders charge the same rate. A
careful search will bring up favorable rates, even for those
with poor credit. Sub-prime lenders often provide loans on a
point or two
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