If you have been faithfully paying a subprime or high interest auto loan you may be able to refinance the loan for a lower interest rate. This could lower your monthly payments saving you some cash each month.
A subprime auto loan is financing that offers special programs for those who have less than perfect credit. There are specialty lenders who are willing to loan money to consumers with poor credit, charging more interest to offset the risk of possible default on the auto loan.
It may be worth your time to take a look at refinancing your loan to lower your monthly payments. However there are a couple things to consider.
First, find out if you would qualify for refinancing; begin by pulling your credit report from all three credit bureaus, Equifax, Transunion and Experian. You want to see if your credit score has increased by faithfully paying your subprime auto loan every month. If your credit score has increased, you may be able to refinance your auto loan.
The three credit bureaus issues credit scores running between 300 and 850 to give prospective lending companies a window in which to see how you manage your finances. If your credit score is above 620, most lenders will issue you an auto loan with a prime interest rate and this could lower your monthly payments.
If you have raised your credit score enough to secure the lower interest rate, the next thing you want to consider is the value of the vehicle you want to refinance. The lender is going to want to assure that the life of the car is going to extend the length of the new loan.
To find the current value of your vehicle, use the Kelley Blue Book, the NADA guide and the Black Book. Use each of these websites and follow the user-friendly instructions to develop a better idea of what your car is worth. This could help you pre-determine your chances of getting the subprime auto loan refinanced.
Once you feel confident that your credit score is higher and that you know the true value of your car, begin researching lenders on-line. There are websites such as Lendingtree.com where lenders bid for your loan. This can help you secure the lowest possible interest rate.
Another source may be your local bank or credit union. Often you have a business relationship with these institutions and this may be another source that can help you refinance your subprime auto loan.
Refinancing your subprime auto loan can help you save money each month. In addition this could further help increase your credit score through diligently making your payments on time. Following these steps could increase your chances of getting your next car loan with a much lower interest rate.
By Mike Reitz
A subprime auto loan is financing that offers special programs for those who have less than perfect credit. There are specialty lenders who are willing to loan money to consumers with poor credit, charging more interest to offset the risk of possible default on the auto loan.
It may be worth your time to take a look at refinancing your loan to lower your monthly payments. However there are a couple things to consider.
First, find out if you would qualify for refinancing; begin by pulling your credit report from all three credit bureaus, Equifax, Transunion and Experian. You want to see if your credit score has increased by faithfully paying your subprime auto loan every month. If your credit score has increased, you may be able to refinance your auto loan.
The three credit bureaus issues credit scores running between 300 and 850 to give prospective lending companies a window in which to see how you manage your finances. If your credit score is above 620, most lenders will issue you an auto loan with a prime interest rate and this could lower your monthly payments.
If you have raised your credit score enough to secure the lower interest rate, the next thing you want to consider is the value of the vehicle you want to refinance. The lender is going to want to assure that the life of the car is going to extend the length of the new loan.
To find the current value of your vehicle, use the Kelley Blue Book, the NADA guide and the Black Book. Use each of these websites and follow the user-friendly instructions to develop a better idea of what your car is worth. This could help you pre-determine your chances of getting the subprime auto loan refinanced.
Once you feel confident that your credit score is higher and that you know the true value of your car, begin researching lenders on-line. There are websites such as Lendingtree.com where lenders bid for your loan. This can help you secure the lowest possible interest rate.
Another source may be your local bank or credit union. Often you have a business relationship with these institutions and this may be another source that can help you refinance your subprime auto loan.
Refinancing your subprime auto loan can help you save money each month. In addition this could further help increase your credit score through diligently making your payments on time. Following these steps could increase your chances of getting your next car loan with a much lower interest rate.
By Mike Reitz
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