How To Refinance an Auto Loan With Bad Credit?

If you have a high interest rate on your car loan, it can be difficult to manage your finances. However, it is possible to get a lower interest rate by refinancing your loan with a lender that is willing to work with borrowers who have less-than-perfect credit. At Badbola, we have researched several reputable lenders that offer reasonable rates for people with low credit scores. In this article, we will share our recommendations for refinancing an auto loan with bad credit, as well as provide some useful information on the topic.

The Best Companies To Refinance an Auto Loan With Bad Credit

Our team conducted a thorough analysis of auto loan rates and providers, including those that offer refinancing options and those that work with borrowers who have less-than-perfect credit. In order to evaluate these providers, we used several criteria including their average rates, reputation in the industry, loan availability, and customer satisfaction. While we believe that any of the providers mentioned in this article would be a good choice, we recommend getting quotes from multiple lenders before making a decision. This will help you find the best rate for your refinancing needs.

Bank of America: Top Choice for Poor Credit

Bank of America (BoA) is a major bank that offers car refinancing options to borrowers with all levels of credit. BoA does not have a minimum credit score requirement, making it a good option for those who may be turned away by other traditional banks.

One of the benefits of working with BoA for car refinancing is the convenience of its extensive network of branches and ATMs across the country. The bank also has a user-friendly online banking platform for those who prefer to manage their finances digitally. Additionally, BoA does not charge any application fees or prepayment penalties.

On the downside, BoA will not refinance vehicles that are more than 10 years old or have more than 125,000 miles on the odometer. The bank also has a high minimum loan amount of $7,500, or $8,000 in Minnesota.

Loan amounts: $7,500 minimum ($8,000 in Minnesota)

Loan terms: 12 to 75 months

Availability: 50 states

Minimum credit score: None

MyAutoloan: Best Low-rate Option

myAutoloan is a lending marketplace that allows borrowers to shop around for refinance auto loans from multiple lenders, even if they have a credit score as low as 575. The website offers a range of helpful tools, including an interest rate chart, interest rate estimator, and payment calculator, to help customers understand the potential costs of refinancing their vehicle.

While myAutoloan is an easy and efficient way to compare loan offers, it is not available in Alaska or Hawaii. Additionally, the lender has a high minimum loan amount of $5,000 and some customers have reported receiving a high volume of emails after submitting their information. Overall, myAutoloan may be a good option for those looking to refinance their car loan but it is important to consider these potential drawbacks.

Loan amounts: $5,000 minimum

Loan terms: 24 to 84 months

Availability: 48 states (not available in Alaska or Hawaii)

Minimum credit score: 575

Auto Credit Express: Good Choice for Bad Credit

If you are having trouble finding car refinancing options due to credit issues, Auto Credit Express may be able to help. As a loan brokerage, the company specializes in securing financing for people with credit challenges, including refinance auto loans for those with bad credit.

Auto Credit Express works with a network of lenders and is able to assist borrowers with no credit history or who have filed for bankruptcy. The company has a strong reputation in the loans industry and has received high ratings from customers online.

While Auto Credit Express may be a good option for those with credit issues, it is worth noting that applying for financing may result in a high volume of marketing calls. Additionally, the interest rates offered by different lenders can vary significantly. Auto Credit Express is available in all 50 states and offers a military discount.

Availability: 50 states

What Does It Mean To Refinance an Auto Loan?

Refinancing an auto loan involves obtaining a new loan to replace an existing one. This process can offer borrowers the opportunity to secure a loan with more favorable terms, such as a lower interest rate, different term length, or lower monthly payments.

There are several reasons why someone might consider refinancing their car loan. For example, if their original loan had a high interest rate and they are now able to secure a lower rate, refinancing can help reduce the overall cost of the loan. On the other hand, borrowers may choose to refinance with a shorter loan term, which will increase their monthly payments but ultimately reduce the amount of time they spend paying off the loan. Alternatively, they may opt to refinance with a longer loan term in order to lower their monthly payment amount.

In addition to these financial considerations, some borrowers may want to refinance their car loan in order to switch to a new lender. This might be due to dissatisfaction with their current lender’s fees, customer service, or other factors. Ultimately, whether refinancing is a good idea will depend on an individual’s specific circumstances and the current market conditions.

Interest Rate vs. Annual Percentage Rate (APR)

When searching for a refinance auto loan, you may come across the terms “interest rate” and “APR,” which are often used interchangeably. However, these terms refer to different aspects of a loan.

The interest rate is the percentage at which a financial institution charges you to borrow money. This is typically expressed as a yearly rate. The APR, or annual percentage rate, includes not only the interest rate but also any additional fees or discounts associated with the loan. Essentially, the APR is the true cost of the loan, including all relevant charges.

It is important to understand the difference between interest rate and APR when shopping for a refinance auto loan, as the APR will give you a more accurate picture of the total cost of the loan.

Can You Refinance an Auto Loan If You Have Bad Credit?

Although it is possible to refinance an auto loan with bad credit, you may have limited options and may not be able to secure a low interest rate. Many lenders are unwilling to work with borrowers who have poor credit scores, and those who are willing may charge higher interest rates to compensate for the additional risk. It is important to shop around and compare multiple offers to find the best possible loan terms. Keep in mind that it may be more difficult to find a lender willing to work with you if your credit score is very low. In these cases, it may be helpful to work on improving your credit before attempting to refinance your auto loan.