How to Refinance a Car Loan With Poor Credit

Refinancing a car loan when you have poor credit can be difficult. Most lenders will not offer a better interest rate for a car if your credit is poor. When you refinance, you may be able to lower your monthly payments by increasing the length of the loan, but that will increase the amount you pay in interest over the length of the loan. If you owe more than the car is worth, then you may have a difficult time refinancing as well.

Instructions

1

Find out the payoff amount for your loan by calling your bank for a quote. Get a quote for at least two weeks out. If you take longer than that, you will end up owing a bit more in interest after your refinance.

2

Check the value of the car using Kelly Blue Book or another car valuing index. If the amount you owe is a lot more than the car is worth, you may need to save up money to pay down the loan so you can refinance. If it is less than $1,000, you may be able to refinance the entire loan.

3

Pull your credit report and take care of any outstanding debts on your credit report. You need to be current on all of your loans before you try to refinance.

4

Contact your credit union and the small banks in the area to set up an appointment for a loan application. Although you have the option of applying online, explaining your situation in person at a smaller bank or credit union may help you get a better rate or terms for your loan.

5

Apply for the loan at several different banks and credit unions. Choose the offer with the best terms. You should look at the interest rate, and the length of the loan and choose the option that offers you the lowest interest and payments you can afford to pay off quickly.