They say that the only thing that is constant in life is change and that couldn't be more true when it comes to your credit and finances and auto refinacing
If unforeseen circumstances forced you into a bad credit high interest rate auto loan (high interest auto loans would be those in the 19% -22% range) then keep reading.
You may have had no choice at the time but to lock into a vehicle at a high interest rate. For a majority of us, this could be our only option with work, school and kids transportation is an unavoidable priority.
You've made every car payment for the last 12 months as scheduled.
Now, since you have made all your auto loan payments on time and cleared up other credit issues you may very well qualify for a much better rate.
If you are a year into the loan it may be worth considering a refinance in order to cut your monthly as well as overall auto expense. With the price of gas moving up further and further this only makes sense.
If you're a sub prime borrower, making one year of on-time auto payments can increase your credit rating by as much as 50-70 points. This may very well qualify you for a lower interest rate - for example, going from 21% to 9% would be a huge impact on your monthly expenses.
On a $16,500 auto loan at 21% your monthly payment is $446 (5 year loan).
After one year you owe $14,414 on the vehicle, so if you were able to refinance the loan at 9% your monthly payment would be $299.
Refinancing would save you $145 monthly - not bad!. Not to mention, the total amount in interest saved over the life of the loan would be a whopping $6700. This is happening all the time with bad credit borrowers who are improving their credit and hanging on to their hard earned money.
So...evaluate your situation and inquire to see if refinancing a high interest bad credit loan is a smart choice for you. If you locked into a sky-high auto loan interest rate but have made all payments on time - you may qualify to refinance back to the single digits. Remember, bad credit loans are in demand and lenders will compete for your loan.
The website below has resources and lenders that specialize solely in bad credit auto loans.
If you are looking for a new vehicle and have bad credit, why not use all the resources to your advantage to get the best terms on new auto purchase or auto refinancing? Visit - bad credit auto loan information and reviews of bad credit auto lenders.
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