How to Get an Auto Refinanced With Bad Credit

If you are someone with bad credit who purchased a vehicle that has a high monthly payment, refinancing is an option that you might want to explore. Getting an auto refinanced is one way to reduce monthly payments while lowering your interest rate. While the process of getting an auto refinanced with bad credit might seem a little daunting, it doesn't have to be difficult and your effort will be rewarded in the long run.

Instructions

1

Obtain a recent credit report with your credit score. Before applying for any loan it is important to know your credit score and to verify that all information being reported to credit bureaus is accurate. Dispute any information that you believe is not correct and pay off any debts you can to help raise your credit score before applying with a company to refinance your auto loan.

2

Write or call the lender currently financing your vehicle and request the pay off amount. The lender will mail you a letter with the exact amount currently owed on your vehicle. This letter will be used by the auto refinancing company to help them approve your requested loan amount. While most refinance companies will contact your lender directly to verify the amount owed on the vehicle, having a pay off amount in writing will help speed up the lending process.

3

Get copies of check stubs and/or tax returns. Proof of employment will be necessary to apply for a loan to refinance your vehicle. If you are self-employed, most lenders will request your last two tax returns with the Schedule C. If you are employed by a company that issues a W-2, you will usually need to provide two check stubs and/or your last W-2.

4

Contact banks and lenders that specialize in bad credit auto refinancing. When it comes to refinancing an auto loan, the original lender will rarely be willing to refinance their own loan. Only use lenders that have been recommended by friends or family or that have good records with the Better Business Bureau and your state's Attorney General. When contacting these lenders, ask what is the usual minimum credit score that they will approve. While most lenders also consider your ability to repay the loan, knowing if your credit score meets the minimum requirement will help you avoid applying for a loan that you will probably not qualify for.

5

Complete your application over the phone or by fax. If your loan to refinance your vehicle is not automatically approved, be sure to call to follow up in two or three business days. Return all requested documents quickly, and if your auto refinancing application is denied, do not be afraid to find out why. In some cases you may be able to have your loan reconsidered if the decision to deny the loan was based on information that you can prove was incorrect.