Auto Refinancing Loans For People With Bad Credit
People with bad credit that are stuck with a car loan with a high APR, and even those who have a car loan with a decent rate, should consider looking into auto refinancing loans for people with bad credit. There are several lenders who are offering this option; they will pay off the original car loan and you will pay the new loan back at a lower APR. Days after you apply for this loan you may be able to use it.
Refinancing your car is like refinancing your home; you pay off the old car loan by getting a new car loan with a lower APR from a different lender. Your car payments will be lower and more affordable if you get auto refinancing loans for people with bad credit, which is good for you. And you will be able to pay the loan off faster, because your interest rate will have gone down.
Dealers try to convince people that the APR is going to be 21-25% and that there is nothing they can do to get a lower APR on a loan. What they need to know that is that they can save money just by getting a lower APR on auto refinance loans for people with bad credit.
If you have a credit score that is 525 or higher, have been working and making your payments on time for at least 6 months, even if you have bad credit there is a good chance that you will be able get a lower APR by getting auto refinancing loans for people with bad credit. If you have been making your current car loan payments on time for a minimum of 3 to 6 months at the 21% APR you probably have been charged, then more than likely you will be eligible to swap that high interest car loan for a refinancing car loan that has a lower APR. It just takes you submitting a free application to the auto loan company that gives auto refinancing loans for people with bad credit to get started; banks have little to no difficulty accepting these loans. You will pay off your loan more quickly and even lower your APR further by sending in additional principle payments. When you have a history of paying on time, even for a few months, banks are more likely to risk loaning to you. Granted, if you have bad credit your APR is not going to be as low as it is for people with perfect credit, but you should see an APR drop of 10% from the 21% you are currently paying.
Caring lenders will put their prospective borrowers into categories (good, fair, or poor) so they can charge a lower APR; most car dealers see a customer with bad or questionable credit and immediately charge them 21% APR. Even a drop of just 1% APR will lower the amount you are paying each month and over the length of the loan will save you a great deal of money. Also, your credit rating will be reflected more accurately because of the lower APR. If you find the correct lender, one who is compassionate, you may be able to pay in the range of 7% APR for average credit, 8% APR for fair credit, and 9% or more for poor credit. If you can get a 10% reduction on your 21% APR, then over the course of a 60 month loan of $16,00 you will manage to save over $5,200; just by reducing your monthly payments about $100. People who have bad credit and are paying a high APR on their car loans definitely need to get car refinancing loans for people with bad credit and reduce that APR to something more manageable.
You are never going to be able to improve your credit if you are paying a high APR, in the 21% range, not only on your car loan but also your credit cards; the APR will never let you get to the point where you are paying on the principle of the loan. Get a used car instead of a newer one if you are going to have to get a loan with a high APR. Auto refinancing loans for people with bad credit may be your only hope.