Managing an auto loan is a great way to repair and rebuild damaged credit, while meeting a need for reliable transportation. With timely repayment, your credit situation can improve enough so that refinancing is an option. Refinancing is when you apply for a new loan, typically with lower interest rates. The question isn’t if you should refinance, but when.
If you want to refinance your auto loan, but you’re not sure if your credit score has improved enough to make this possible, a cosigner will improve your approval chances. Just make sure that the cosigner you have in mind is a qualified applicant who understands the risks that might be involved.
If your credit score has improved, interest rates across the board have gone down, or you have simply realized that you didn’t get a great deal on your auto loan, you may be thinking of refinancing. This basically means that you will be paying the current loan off with a new loan that comes with different terms. But you should know, while you are trying save money through refinancing, your credit rating may incur at least a little damage in the process.
At first you were so excited to be able to get a lease with bad credit. But those bad credit rates were just too tight for your poor budget and now you want out. What are your options?
You can try to refinance your auto loan while you have damaged credit, but the results may not be what you hope.
Depending on how much you owe and the value of your vehicle, it could be a good idea to refinance your existing auto loan.