If you’re considering refinancing a bad credit car loan in Los Angeles because your credit score has improved, do you know where to start? It’s important that you understand what the auto refinancing requirements are.

Refinancing Requirements and Options

In order to refinance a bad credit car loan in Los Angeles, your credit score needs to have improved enough since taking out the initial loan. To give you an opportunity to accomplish this, around a year or two typically needs to have passed.

When you have bad credit when taking out the original loan, lenders like to see that you’ve been serious about paying it back. This is why they require that you've established a record of on-time payments and that your credit score has improved to qualify to refinance.

Other refinancing requirements you have to meet include:

  • You have to be current on your loan payments.
  • You can't be upside down in your loan.

Vehicle Requirements for Refinancing

When you refinance a car loan in LA, the amount you’re refinancing must fall within the lender’s guidelines, plus your vehicle needs to qualify as well. Lenders have rules because they want to increase the chances of the new loan being paid back.

What are the car requirements set by lenders in Los Angeles? It varies, but most follow these three rules:

  1. Age limit – The majority of indirect lenders in Los Angeles, such as subprime lenders and captive lenders, set vehicle age requirements. Lenders generally won't refinance a car that's over 10 years old, but the specifics vary by lender.
  2. Mileage limit – On top of the age limit comes mileage limits. Lenders in LA usually set the mileage limit at 100,000 miles, but the specifics vary.
  3. Vehicle type – Your car must have a clean title and not be a commercial or fleet vehicle.

How Refinancing a Car Loan Helps You

How Do I Refinance a Car Loan in Los Angeles?If you’re approved for refinancing, you can lower your monthly payment by extending the loan term or qualifying for a better interest rate, or both.

Ideally, you want to qualify for the better interest rate since it saves you money in interest charges and lowers your monthly payment – even if you keep the same loan term.

However, if your credit score hasn’t improved much and you still qualify, refinancing your auto loan and extending the loan term can still help. When you extend the loan term, you lower the monthly payment even without a lower interest rate – although you don’t save money overall since the interest charges actually increase. Still, this does give you some room in your budget if you’re struggling to keep up with the payment.

The Bottom Line

Different lenders in Los Angeles have different refinancing requirements that you and your car need to meet. If you need help with refinancing, our trusted partner can help you view and compare refinancing offers online.

If you’re simply looking to finance a vehicle and you have bad credit, Auto Credit Express can help with that as well. Our fast and free service matches consumers dealing with poor credit to dealerships that are trained in special finance. We work with bad credit car dealers all over Los Angeles and the rest of the country.

If you have bad credit and need an auto loan, you're in the right place. Get the process started today by filling out our free and quick car loan request form.