Start Here: Get Approved Online
Enter your zip / postal code to begin
Bad Credit Auto Refinance
Common scenarios for bad credit auto loan refinancing:
The first scenario is for people who have a loan at a higher interest rate because of bad credit, have paid well on the loan for awhile, and now want to lower their car payment. This is a great reason to consider a bad credit auto loan refinance.
Example:
A consumer financed $10,000 for 36 months at 21.95% interest and has made 8 payments of $381.65. There are 28 payments remaining and the balance is $8,304.57.
The consumer refinances the auto loan for 25 months at 12.95% interest. The payments are lowered to $380.78 and the loan is paid of three months earlier.
In this example the total of payments has been reduced from $13,716.00 to $12,572.70. This equals a decrease of $1,143.30
The second scenario is for people who have a conventional loan and have experienced bad credit since the inception of the loan. If this is the case, chances are that you are not a good candidate to refinance your auto loan. It is unlikely that the new rate would be lower than your current rate.
About the only reason this would be beneficial is if you had only a short while left to pay on the loan and wanted to extend the term out to lower the payment. Perhaps you income has lowered since you purchased your car, or some other circumstance has caused you to need more money each month.
Example:
A consumer financed $10,000 for 36 months at 7.5% interest and has made 18 payments of $311.06. There are 18 payments remaining and the balance is $5,280.08.
The consumer refinances the loan for 36 months at 16% interest. The payments are lowered to $185.63, a monthly savings of $125.43.
In this example the combined total of all payments has increased substantially. Without refinancing, the total of payments would have been $11,198.16. After refinancing the total of the payments is $12,281.76. This is an increase of $1,086.30. This scenario is only recommended for people in financial distress and absolutely have to obtain a smaller car payment.
The first scenario is for people who have a loan at a higher interest rate because of bad credit, have paid well on the loan for awhile, and now want to lower their car payment. This is a great reason to consider a bad credit auto loan refinance.
Example:
A consumer financed $10,000 for 36 months at 21.95% interest and has made 8 payments of $381.65. There are 28 payments remaining and the balance is $8,304.57.
The consumer refinances the auto loan for 25 months at 12.95% interest. The payments are lowered to $380.78 and the loan is paid of three months earlier.
In this example the total of payments has been reduced from $13,716.00 to $12,572.70. This equals a decrease of $1,143.30
The second scenario is for people who have a conventional loan and have experienced bad credit since the inception of the loan. If this is the case, chances are that you are not a good candidate to refinance your auto loan. It is unlikely that the new rate would be lower than your current rate.
About the only reason this would be beneficial is if you had only a short while left to pay on the loan and wanted to extend the term out to lower the payment. Perhaps you income has lowered since you purchased your car, or some other circumstance has caused you to need more money each month.
Example:
A consumer financed $10,000 for 36 months at 7.5% interest and has made 18 payments of $311.06. There are 18 payments remaining and the balance is $5,280.08.
The consumer refinances the loan for 36 months at 16% interest. The payments are lowered to $185.63, a monthly savings of $125.43.
In this example the combined total of all payments has increased substantially. Without refinancing, the total of payments would have been $11,198.16. After refinancing the total of the payments is $12,281.76. This is an increase of $1,086.30. This scenario is only recommended for people in financial distress and absolutely have to obtain a smaller car payment.
All Content © Car-Loans-Financing-Autos.com 2009