Choosing the appropriate bank that can refinance an auto loan with bad credit can amount to a lot. This blog post shall focus on the top banks and financial companies that give opportunities to those with poor credit to refinance.
Factors to consider when refinancing a car with poor credit
Bad credit is defined as a FICO score between 300 and 579. However, there are still some car refinance firms ready to assist borrowers like you.
Shop for numerous lenders
Take more time shopping for affordable loans with numerous lenders so that you will be able to compare quotations from each one. By taking these additional steps, you are likely to get a lender who will accept loaning money to you.
Credit History
You need to know that your credit score is not all that lenders look at. However, you can still find refinancing benefits even though your credit history may not show any impressive results
Refinancing An Auto Loan With Bad Credit
In some cases, even when you have bad credit, you may consider refinancing your car. At this point, this option becomes a decision that will help you improve your creditworthiness and save some money in the future.
How to refinance your car with bad credit:
1. Improved Credit Score
The chance to improve your credit score is one of the key benefits of going through car loan refinancing. Credit scores improve after a few years of timely payments if you are still holding on to the original loan.
Through refinancing, you will have the opportunity to obtain lower interest rates that help reduce monthly payments and aid in improving your credit record.
2. Lower Interest Rates
Interest rates are never uniform throughout time, and it can be beneficial if someone had higher interest rates when they first obtained the loan and then saw that the current interest rate was much lower than what they paid for the loan.
A small percentage of the interest rates will translate to substantial savings on your part during the life span of the mortgage.
Do your homework and compare what different lending institutions are offering so that you can choose the most suitable offer among them for your specific case.
3. Changing Financial Situation
Refinancing your car loan can be helpful if you have experienced a substantial change in your income, for instance, due to obtaining a job that pays more or starting to live with a partner who provides additional income.
This enables the pocketing of the surplus and spending it on other aspects, like an emergency fund and clearing other expensive loans.
Top Banks That Can Refinance An Auto Loan With Poor Credit
For those with low-to-acceptable credit scores, we shall look at their interest rates as well as why you should choose any of the options.
- Capital One
- Bank of America
- Auto Credit Express
- Consumers Credit Union
- MyAutoLoan
1. Capital One
Capital One is famed for helping people with different credit scores refinance their auto loans. Although their interest rates depend on an individual’s credit status, they are mostly quite favorable.
It makes refinancing easy with a convenient online platform as well as good customer service. Take note that, unlike other banks, Capital One may have higher fees.
If your credit is not the best or if you are just thinking about decreasing your APR, then find yourself a cosigner to help you out. By playing this card smartly, you are more likely to be considered eligible for a loan, and maybe the interest rates will be reduced.
This is because it understands that, at times, a person’s credit rating does not give a full picture of their current financial status.
Capital One offers loans ranging between $7,500 and $50,000, thus catering to diverse borrowing requirements. In addition, they offer flexible loan terms ranging from 24-72 months.
However, the best part is that there will be no penalty if you repay your loan before its due date.
2. Bank of America
One of the top banks that can refinance an auto loan with bad credit is Bank of America (BOA). If you have recently improved your credit or have other promising resources in your favor, Bank of America may be a good option.
With their quick and easy online application process, you can have your application completed in just 60 seconds!
The Bank of America offers car loans in all 50 states, so you don’t have to worry about your location. Whether you are in California or New York City, you can take advantage of their affordable rates.
BOA Requirements
Bank of America doesn’t publish its minimum recommended credit score, so even if your credit is low, you can apply. On the other hand, f you’re already a Bank of America customer, you may qualify for their preferred rate discount.
Take note:
Bank of America accepts cars with a maximum mileage of 125,000 and vehicles up to 10 years old. So even if your car isn’t brand new, you can still secure a loan.
Rеfinancе auto loans at BOA
• APR: as low as 7.59%
• Loan amounts: $7,500–$100,000
• Loan terms: 48, 60, or 72 months
Read also:Â Best Auto Loan Rates: BOA, Chase Bank, and US Bank
3. Auto Credit Express
Auto Express Credit consider many important items when qualifying borrowers for loans.
Above all, they look at how consistent you are with payments concerning your current car loan. To qualify for a refinance auto loan here, you must show a history of having paid on time and in full for the last 18–36 months.
This demonstrates your reliability and accountability as a borrower, even if you have faced obstacles with past financial responsibilities.
In addition to credit history, Auto Express Credit lenders also consider other significant factors in their loan decisions. Your employment history serves as an indicator of stability and a reliable source of income.
Accordingly, a consistent work record can significantly enhance your likelihood of loan approval.
4. Consumers Credit Union
As one of the largest banks in the industry, Consumer Credit Union has established itself as a leader in providing affordable financing to individuals with poor credit score.
Through their refinancing program, Consumer Credit Union offers affordable rates that make your car loan payments easier. Also, their application process is easy to use.
When it comes to consumer credit unions, it’s all about flexibility. You can choose anywhere from 36 months to 84 months to repay the loan, giving you plenty of time to manage your finances.
And don’t worry if you only need a small loan, as the Consumer Credit Union only offers a minimum loan of $250.
While their maximum financial loan is $250,000, they understand that sometimes it takes a little longer to pay for that dream car.
If you’re looking to buy a brand new car, you’ll enjoy a starting rate of just 5.94% APR for the next few years, 2021 or older. For older model from 2017 to 2020, the rates starts from 6.19% APR.
5. MyAutoLoan
MyAutoLoan is among the best online platforms for auto loan refinancing. What makes MyAutoLoan different from competitors is its extensive network of lenders, which ensures customers have multiple options for financing.
In addition, MyAutoLoan offers a unique tool called a “credit analyzer,” which can assess applicants’ creditworthiness and determine the most appropriate loan option.
MyAutoLoan Refinancing Rates
36 mths
or less: 4.99%
37-60
mths: 5.49%
61-72
mths: 5.49%
73-84
mths: 5.74%.
Conclusion
Through research, you can find some of the best banks that can refinance an auto loan with bad credit. However, based on the ratings by users, the lists in this article are among the best.
So, visit any of the links to see their refinancing options. With this, you will not only save money but also boost your credit score.
