Many borrowers that are holding poor Credit find it difficult to take out Auto loans on affordable interest. Fortunately, it is not as difficult as it seems because there are many lenders that are willing to work with borrowers having poor Credit. However, when you work with high risk lenders, you are likely to face expensive loans, but you can make adjustments to turn it into an affordable Loan.
In the particular situation that is mentioned above, Loan repayment terms hold great importance. You can tweak your Loan repayment term by negotiating with your lender. Many people think that extensions in Loan repayment are a good way to get lower monthly payments and to pay off the Loan with ease. However, it is not a wise option in all cases, especially if you are having bad credit score.
It is true that shorter Loan repayment terms mean higher monthly payment that many of the borrowers cannot pay off with ease, but the plus of shorter terms is the overall lower interest on the AutoLoan. For instance, if you are financing a motor vehicle with its selling cost of $15,000 inclusive of 7% tax and fees along with a down payment of $2,000 inclusive of $120 fee that is nontaxable, then total amount of your AutoLoan is $14,170. You can use a Loan calculator to calculate these figures.
If you are financing this Car with the above mentioned AutoLoan figures for 60 months then you will have to pay an amount of $337 on monthly basis. You will be paying off more interest over the whole life of your AutoLoan and that amount of interest us $6034. Conversely, if you decide to work with 48 months Loan term, then your monthly payment will be $94 and the amount of interest will be $4742 over the life of the Loan which means a decrease of about $1300 as compared to the five years AutoLoan.
Protect Loss of Negative Equity
When you choose to work with shorter Loan repayment terms, you actually select ease of paying your Loan without any tension. It is not a hidden reality that a Car loses its value with the passage of time. In reality, if you are having negative equity on your Car if you owe more than its value that it is appraised for the time when you consider trade it in. You can get over the problem of negative equity by choosing shorter terms of Loan.
Best Auto Refinance Loans for Bad Credit Applicants
When you refinance your existing loan, you’re taking out a new Loan to replace the old one. You’ll use the proceeds of the refinance to pay off the existing debt and immediately begin making your monthly payment to the refinance lender.
The main reason to seek a refinance Loan is to lower your existing interest rate or current Loan fees. By shaving just 1% off of your APR, you can lower your monthly payment substantially and pay your Loan off earlier.
Many of the lenders listed below are online lending networks — meaning that they partner with several independent lenders who each review the single prequalifying application that you submit to each network. Since multiple lenders consider your request, you could receive more than one Loan offer to choose from.
Most of the lenders associated with each network specifically finance applicants who have bad Credit. That means you can possibly lower your interest rate and improve your Credit standing with a new Loan from one of our top-rated services below.
Auto Credit Express has long been one of our favorite Auto lending networks for bad Credit because it partners with a massive group of lenders who each have flexible Credit requirements. In fact, more than 1,200 partner lenders have combined to close more than $1 billion in bad Credit loans since 1999.
Lenders reside in all 50 states, but you aren’t limited to choosing a lender in your home region. The large network means that all 1,200-plus lenders will compete for your business. That often results in more forgiving approval standards and competitive Loan terms.
The network’s application takes approximately three minutes to complete. Shortly after, you’ll receive a status update and potentially multiple Loan offers to choose from. The process is quick and painless, which is obvious from the more than 13,000 people who accept financing through the network each month.
To qualify for refinancing through AutoCredit Express, you must:
myAutoloan.com is also a lending network that partners with many lenders who specialize in bad Credit loans. One single application can result in up to four Loan offers within minutes — with no obligation to accept any Loan offer you receive.
Following a free and secure two-minute prequalifying form, the network quickly works to match your request to up to four of its many partner lenders. If you receive multiple Loan offers, you can take your time to compare the terms and conditions and find the offer that’s right for you.
Once you choose a Loan offer that you like, myAutoloan.com will redirect you to the lender’s website to complete the remainder of the Loan paperwork — either online or through hard copy. Once the lender completes the underwriting process and closes your Loan, they will make arrangements to pay off your current Loan.
From that point, you’ll begin making monthly payments to the new lender.
The Cash Back refinancing allows you to tap into your Loan’s equity to pay off your current Loan and receive cash for the difference between your balance and the vehicle’s current value. You can use the cash however you please while still possibly lowering your interest rate.
Traditional refinancing allows you to borrow just enough to pay off your existing Loan balance. The new lender submits the funds to pay off your Car and then becomes your Auto lender.
Cash Back and Traditional refinancing options available
Free to apply online
Applications take less than 10 minutes to complete
Loan options exist that could lower your monthly payment by reducing your current APR, extending your Loan duration, or eliminating some of your current Loan’s fees.
Some lenders also allow new borrowers to skip their payments for the first 60 days after closing a Loan. You start by completing a brief and free application. Shortly after submitting the form, the network could return with multiple Loan offers for you to choose from.
Before applying, take note that RoadLoans only accepts refinancing applications for cars, SUVs, and pickup trucks.
4. Capital One Refinance
You may know Capital One from its many Credit card options, as well as its catchy “What’s in your wallet?” advertisements. But the large global bank has many financial products beyond the plastic in your wallet. Capital One’s auto refinancing arm can prequalify you before you submit an official application.
To qualify, your vehicle must be no more than seven years old with between $7,500 and $50,000 still owed on the Loan. You must be current on payments to a lender that is FDIC insured and currently reporting your payment history to at least one major Credit reporting bureau.
Capital One does not refinance Oldsmobile, Daewoo, Saab, Suzuki, or Isuzu vehicles, commercial vehicles, motorcycles, recreational vehicles (RVs), ATVs, boats, camper vans, motor homes, lemon vehicles, branded title vehicles, lease buyouts, or vehicles without a Vehicle Identification Number (VIN) or title issued.
Capital One doesn’t charge any refinancing fees and can fully process and underwrite refinance Loan applications online in a matter of days.
5. OpenRoad Lending
OpenRoad Lending provides a brief online application that only takes minutes to complete. Once you submit the form, you can access your application updates and upload any necessary documents to the network’s online portal, which acts as your Loan hub during the application process.
The network claims that it’s among the fastest refinancing options available, with some loans closing in a matter of hours. To qualify, you must owe at least $7,500 on your current vehicle Loan — and that total must be less than the vehicle’s current Kelley Blue Book value.
Minimum of $7,500 owed on your current Loan to qualify
Customers save more than $100/month, on average
A+ BBB rating
According to OpenRoad, the network has helped hundreds of thousands of customers save more than $100 per month, on average, by refinancing their AutoLoan. Those types of averages are why the company recently ranked No. 37 on Inc. 500’s list of Fastest Growing Companies.