Many residents of Seattle don’t have perfect credit, and may need to take out a bad credit auto loan. There’s nothing wrong with this, but loans like this typically have a higher than average interest rate, and you end up paying more for one of these loans. The good news is that you may be able to refinance your car loan and save money on interest charges. If you're wondering how to qualify for refinancing after taking on a bad credit auto loan, keep on reading.
Refinancing Requirements You Must Meet
If you want to refinance a bad credit car loan in Seattle, your credit score must be considered good, or at least have improved since taking out the loan. If this hasn't happened, your chances of qualifying are lower.
Because you took out a bad credit auto loan, lenders need to see that you are taking the loan seriously, and have been making regular, on-time payments in order to approve you for refinancing. If you have, and there are no additional negative marks on your credit reports, your credit score should have increased since taking out the loan.
Additionally, you have to be current on your loan payments, and your loan amount must fall within the refinancing lender's acceptable limits in order to qualify.
Refinancing Requirements for Your Vehicle
It’s important that your vehicle qualifies for refinancing, as well. Each lender operating in Seattle has their own refinancing guidelines your car needs to meet. These limits are set by lenders so that they can finance vehicle that are dependable – they don’t want to run the risk of a car breaking down during the loan term.
Although specifics vary by lender, you can expect most Seattle lenders to follow these four refinancing guidelines:
- Age limit – Most indirect lenders, such as subprime and captive lenders, set vehicle age requirements at 10 years old or less. However, it’s not uncommon for direct lenders like banks and credit unions to cap a car’s age at seven years old.
- Mileage limit – Generally, Emerald City lenders set the mileage limit at 100,000 miles or less, regardless of age, but this can be set lower or higher depending on the lender.
- Vehicle type – Your car must have a clean title, and not be a commercial or fleet vehicle.
- Upside down – You also can't be upside down in your current loan, which means your loan balance can't be higher than what your car is worth.
How Refinancing Helps
Seattleites looking to refinance a vehicle are typically hoping to save money. Once you qualify for refinancing, you can either extend the loan term to lower your monthly payment, or qualify for a lower interest rate, which lowers your monthly payment and the overall cost of the loan.
Of the two, you ideally want the lower interest rate, since you don’t have to pay any additional interest charges like you would if you were to extend the loan term.
Looking for Refinancing Assistance in Seattle?
Although you can’t refinance your auto loan immediately, there are many lenders in Seattle that are willing to help you refinance down the road. The key is to work with the right lender, and our trusted refinancing partner can help you view and compare offers online.
If you’re simply looking for a bad credit car loan, we can assist with that as well. Auto Credit Express specializes in helping credit-challenged consumers get matched to the right dealership so they can get the financing they need. Getting started is simple: just fill out our free auto loan request form, and we’ll get right to work connecting you!