Refinancing Your Car Loan - Auto Refinance Loans For Bad Credit

Are you looking to refinance your car loan? If yes, then you have come to the right place since this post seeks to discuss various aspects of car refinancing. Now, the first question is how to refinance car. We will just seek to answer that. Let us discover in the course of the post.

If you are asking how to refinance my auto loan then you should first try and understand what refinancing actually means. Borrowers choose to refinance their present car loan when they can no longer repay the car loan with their present conditions. A financial crunch is possibly the reason behind such a scenario. Now, your present creditor might as well modify your loan terms by reducing the rate of interest or extending the loan term so that the installments to be paid each month are reduced.

If you are looking forward to refinance auto loans for bad credit and your present lender refuses to help you in this regard then there is no need to psyche out. There are other options as well. You can seek help from other lenders who will actually provide you the amount needed to pay off the remaining loan to your present lender and charge you lower interest on the same.

It does not matter whether you are reaching out to old or new lender for the car refinance for bad credit you should be careful enough to research on the latest refinancing rates. Secure quotes from different lenders and find out which one of them is turning out to be the most affordable option for you. If you are settling for the services of a new lender then make sure you are actually surveying the background of the company thoroughly before entering into a transaction with the same. Go through the online reviews of the companies and reach out for personal recommendations as well.

Please visit the website in order to find out more about car loans in general. Access a wide range of great car loan deals here as well. Hopefully, we have been able to help you with this particular post as well.

Laura Fleming Posted on February 3rd, 2016

5 Best Companies to Refinance Your Car (STI)

What is the best company to refinance auto loan with

What is the best company to refinance auto loan with

What is the best company to refinance auto loan with

When you need to buy a new car fast, you can end up accepting an auto loan with a high annual percentage rate (APR) just to close the deal. Paying more for interest on a car loan than what you should be paying can cost you money that you could use to pay off bills or put into your savings. Therefore, it pays to shop for a refinance loan at a lower interest rate. Consider one of these top auto refinance companies.

The United Services Automobile Association (USAA) offers 36-month auto refinance loans through its Auto Circle Program, with rates as low as 1.49% on models 2015 or later, and 2.75% for models older than 2014. You must be a USAA member to qualify for the loans. Some loans approvals are instant, and you can get an answer on your application in about five minutes. After e-signing your loan documents in your USAA account, you can print out your loan check instantly or send the payoff amount to your dealer by using your smartphone. USAA does not charge an application fee, and you won't have to make payments on your new loan for up to 60 days. Reviews on the USAA website give USAA auto loans 4.4 stars.

Autopay is a lender marketplace that partners with credit unions and other finance institutions to offer loans at interest rates based on your credit profile. If you want to maintain a traditional loan, Autopay can help you find better interest rates from a lender that suits your needs. Cash-back refinances through Autopay can help you to get up to $12,000 in cash that you can use to pay off other debts. If you plan to keep a leased car after the end of a lease, the lease payoff option allows you to pay off your lease early and avoid costly mileage fees. Customer reviews on LendingTree give Autopay 4.3 out of 5 stars.

CarsDirect specializes in helping people with bad credit find lenders to finance and refinance their vehicles. The process begins by filling out an online application that provides CarsDirect with some basic information about your gross monthly income, employment and housing payment, and you give the company permission to pull your credit. A credit processor will contact you with more information about the loans for which you qualify. When you decide to work with a lender, you will probably have to provide additional documentation, such as proof of your income, residence and insurance. The interest rate on the loan offer you receive depends on your credit score. Testimonials on CarsDirect's website give the service high marks for an easy application process.

RoadLoans offers both traditional and cash-back refinance options. The RoadLoans traditional finance option allows you to lower your APR and monthly car loan. As an added perk, you can skip payments on your new car loan for up to 60 days. The cash-back refinancing option allows you to borrow more than you owe, up to the full value of your car, but the cash-back option is not available in all states. RoadLoans takes applicants with a wide range of credit backgrounds, so interest rates vary. As of August 2016, RoadLoans was the top-ranked auto refinance company on the Consumer Affairs website, with an overall rating of over 4.5 stars.

LightStream is a division of SunTrust Banks Inc. (NYSE: STI). As of August 2016, the lender offers auto refinance rates between 2.24 and 3.49% APR for 24 to 36 months, and 4.94 to 6.19% for 61 to 72 months. LightStream offers unsecured auto refinance loans for borrowers with excellent credit, but borrowers with less-than-stellar credit can qualify for secured auto loans. You can borrow from $5,000 to $100,000 to refinance a loan on any car through a simple online application process.

what is the best company to refinance auto loan with

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I bought a 2004 Chevrolet Malibu one year ago I owe a little over 10000 . My interest rate is 20% . My boyfriend said he will cosign for me to refinance, is that possible?

What is the best company to refinance auto loan with

Possible? Sure. The question is where do you plan on going to get the money and how well can you shop around to find the best rate for the loan. Banks and credit unions would be one option but I'd be curious as to how well do you know the various routes you could take.

You will not be able to. Here is why you don't have the collateral. You have a car that is probably not worth 10k. Also you probably do not have a simple interest loan. You have to look at your contract. Make sure that there is not early payment fee. Also look for the rule of 78's Explanation of Rule of 78's

I can't sugarcoat this chances are you were ripped off because you had bad credit putting you into an even deeper hole.

It is possible to achieve a substitute for refinancing, but because of the "short" life of cars at least relative to housing, there are no true refinancings.

First, the entire loan will not be able to be refinanced. The balance less approximately 80% of the value of the car will have to be repaid. Cars depreciate by something like 20% per year, so $2,000 will have to be repaid.

Now, you should be able to get a loan if your boyfriend has good credit, but the interest rate will not drop too much further from the current loan's rate because of your presumably bad credit rating, assumed because of your current interest rate.

While this is doable, this is not a good strategy if you intend to have a long term relationship. One of the worst corruptors of a relationship is money. It will put a strain on your relationship and lower the odds of success.

The optimal strategy, if the monthly payments are too high, is to try to sell the car so to buy a cheaper car. The difficulty here is that the bank will not allow this if balance of the loan exceeds the proceeds from the sale, so putting as much money towards paying the balance to allow a sale is best.

As a side note, please insure your car against occurrences such as theft and damage with a deductible low enough to justify the monthly payment. It is a terrible position to have a loan, no car, and no collateral against the car.

More stories from Stephanie Taylor Christensen

You’ve likely heard about the benefits of refinancing a home loan. With today’s low interest rates, those who have enough equity in their home and the credit required for a refinance could lower their monthly payments considerably.

But did you know that, similarly, you could lower your car payments by refinancing your auto loan?

A common misconception about auto refinancing is that it is similar to home refinancing in complexity and requirements, says Phil Reed, the senior consumer advice editor at auto information website The process is actually much simpler, in terms of both qualification criteria (there is more emphasis on the applicant’s credit than on the balance and value of the car, according to Reed) and the time and costs involved.

Here’s what you need to know about auto refinancing and how to determine whether it could help you save.

Thanks to today’s low interest rates, anyone who purchased and financed a car a few years ago could potentially find an auto loan with a lower rate. A few general guidelines:

* Is your current interest rate significantly higher than what you could get today?

In the fourth quarter of 2008, a 48-month new auto loan issued by a commercial lender averaged 7.06%. Today, the average rate on a 36-month used-car loan is 5.47%, according to Bankrate. And the average rate on a 48-month new car loan is 4.89%.

“Most people aren’t aware of the interest rates’ impact to their monthly payment,” says Reed. Edmunds and other online resources offer basic calculators that allow you to quickly determine just how significant a lower interest rate can be on a monthly loan payment.

* Has your credit score improved?

You could save even more if your financial situation has changed for the better – and your credit score is higher — since you took out that original car loan.

As with any loan, you do need good credit to qualify for auto refinancing. However, the criteria is far less stringent than that associated with home loans, says Reed. According to FICO (the company that calculates the widely-used FICO scores), you need a FICO score of 720 or more to qualify for the best auto loan rates. On a $25,000 36-month loan at 4.784% (the national average as of March 30, 2011), your monthly payment would be $747. On that same loan, you’d have a $828 monthly payment if your FICO score was between 620 and 659, which would put you at an average 11.762% interest rate, according to FICO.

* Are you in a lengthy loan (five- to eight-year term)?

Jack Nerad, executive editorial director and market analyst for Kelley Blue Book advises anyone in a lengthy auto loan (with an original five- to eight-year term), to research auto refinancing.

Many people only pay attention to their monthly payment when purchasing a car and have no idea how much of that payment is interest. The longer the term of the loan, the more interest you’ll fork over to the bank until it’s paid off, even if your monthly payment seems low. Refinancing into a loan with a shorter term will lower the total amount of interest you’ll pay, even if it doesn’t considerably lower your monthly payment.

Avoid Refinancing Your Auto Loan If:

* Your existing loan has a prepayment penalty or the new loan is fraught with fees that would negate the potential interest savings.

Anyone seeking an auto refinance should completely understand the details behind the new and existing loan terms, says Reed.

* Refinancing will extend the life of your loan.

Unless you’re seriously in danger of missing payments or defaulting on your loan altogether, avoid refinancing into a loan that would extend your current one. Your monthly payment may go down, but you’ll end up forking more money to the bank or dealer’s financing arm over the life of the new loan.

Unlike refinancing a mortgage, auto refinancing is quite painless, according to Reed. It can often be handled online, and might take just one or two hours to complete. The first step is to understand your current loan terms (check your monthly statements for the interest rate, remaining balance, and payoff amount) — which you already should have done to determine if you’d benefit from refinancing to begin with.

Reed also advises informing your current lender that you are actively seeking a better deal. They may be willing to refinance your existing loan and save you from switching to a new a lender. As with any rate-based loan, negotiation is always an option, but Reed acknowledges that particularly when dealing with large banks, auto refinancing interest rates may be fairly fixed. Further, the person you are dealing with may not be authorized to make sweeping changes to your loan agreement.

Ready to get started? Shop around on sites like and, where you can find current rate information and lender referrals, if necessary. Reed recommends Capital One Auto Finance as another potentially good option.

Don’t ignore dealer finance programs, either. They are currently subsidized by auto manufacturers, making them a potentially competitive resource, according to Nerad.

Terms, conditions, features, availability, pricing, fees, service and support options subject to change without notice.

Ask Credit Karma: How Does My Auto Loan Refinance Affect My Credit?

Would you mind covering how or if a refinance on a car loan affects one’s credit score? I am thinking of doing this, but can’t find info about it anywhere. Thanks so much! Love you guys!! – Rebecca W.

Refinancing your auto loan can be a great way to save money, if you get approved for a lower interest rate. A good credit score is the way to get there.

When you apply to refinance your auto loan, it will cause a hard inquiry on your credit report. A hard inquiry is when a lender, credit card issuer or other financial institution does a credit check to assess whether or not to approve you for a line of credit. Each hard inquiry generally drops your score by a few points and will lessen in impact after two to three months. However, it will remain on your credit report for two years.

What is the best company to refinance auto loan withFor that reason, you should avoid applying for several loan options at one time. Multiple hard inquiries will significantly decrease your credit score for a period of time and tell lenders that you may be desperate for credit. Instead, focus on building up your credit to better your chances for approval, finding the right lender, and doing your research to find your best loan option.

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After you’re approved for refinance, the original lender will close out the old loan and the new loan will appear on your credit report. So, when it comes to your lines of credit on your report, you’ll come out even. The only other impact your refinance can have on your credit score depends on your monthly payments; as long as you pay on-time every month, your refinance can positively affect your credit score.

In order to make sure you get the best rates possible, follow this checklist before applying to refinance your auto loan:

  • Get your credit report. If you haven’t gotten your free credit report from this year, get it and comb through it for any errors. The three most common errors are outdated personal information, mistaken or fraudulent accounts and incorrect account details. If you do find an error, dispute it with the credit bureaus and reporting company.
  • Take some time. The better your credit, the better your chance for approval and the more money you can save by landing the lowest interest rate. Spend the time to work on and improve your credit score by honing in on your credit card utilization rate, staying on top of payments and monitoring fluctuations in your score.
  • Research auto loans. Find the best loan for your auto refinance by comparing rates and terms with Credit Karma’s “My Savings” dashboard. My Savings gathers information from multiple lenders in one place, so you can do your research easily and see how much you can save based on consumer reviews and rate comparisons. Make sure you always read all of the details and fine print of an offer before taking it.

People often refinance their auto loan to reduce their monthly payments, which extends their loan. But this approach can also mean paying more in interest over the life of the auto loan. The best reason to refinance is to get the lowest interest rate possible. Before applying to refinance your loan, do the math and make sure it’s the right move to make to save you money in the long run.