What can you do if you have bad credit for a car loan? Simply put, there are a few different options you have no matter how bad your credit is – even if you have already been turned down by your bank or credit union for a loan.

In this post we will discuss two of these options: getting a co-signer to help by signing with you on your loan, and finding a bad credit auto lender who specializes in such loans. Remember, however, that there is always a need to both monitor and work on fixing your credit if you are in this situation, and you should probably take this opportunity to do so.

First option – finding a co-signer. This is probably the most common way for people who either don’t have credit or who have bad credit to get a car loan, with a good rate and terms, from a bank or a credit union. This is a very common practice in the industry, and it’s so common that your lender really should talk to you about this option from day one when looking for the loan.

However, make sure that the person 1) has a good credit rating, 2) if possible has been living in the same area for a little while (to show that they are more permenant and less of a risk to the bank), and 3) if possible has a relationship with the bank. These three things will help you get either a new loan or a refinance car loan for bad credit.

The second option, which is also a common practice, is to find a dealer who specializes in bad credit car loans. Usually these are smaller car lots with lots of advertising and billboards stating that they help people with bad credit or no credit to get into a car. However, be careful with such loans, as your interest rate will be higher and you will most likely have to make a larger down payment than you would with a traditional car bank loan.

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There are several car loan companies that are willing to work with people that have less than perfect credit scores (you can check your credit for free at annualcreditreport.com). Some of these companies are larger, and some of these companies are smaller, but there are many options available when it comes to car loans for people with bad credit.The reason that car loans are still accessible for people going through a bad credit situation, is that cars are something that can easily be repossessed. Cars must be parked outside, and if a loan is delinquent, a repossession company can come and pick up a car legally and quickly.

There are a few things to keep in mind if you are looking for a car loan. More often than not, these car loans will have higher interest rates and you’ll be paying more per month for your car than your contemporaries will. For example, someone who leases a car, and gets a lease of $200.00 a month – with good credit – is very common.

But because you’re higher risk investment for the loan company, your interest rate will be higher, and chances are your monthly payment could be $350.00 a month for the same vehicle. For some this is worth the extra cost, but for many is better to get the used car for a few thousand dollars, and repair their credit over the next few years.

Once the credit is repaired, a person can expect to pay normal rates for leasing a car. If for your business or career, having a used car is not a feasible or professional option, or if you do not have time to save up for purchasing a used car, then a bad credit car loan, will be ideal.

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Good for you.

Did have any idea that it is possible to refinance car loans, in the same way you refinance your home? Did you know that it is a lot easier to refinance auto loans than home mortgages?

Auto loan rates are getting lower all the time – around 7% average in most cities. If you bought a car recently, you may be kicking yourself for not waiting for a lower rate. If back then you had bad credit, low APR car loans may have seemed to be out of reach.

Car Loans For Bad Credit

Car loans for bad credit are notoriously expensive.

You might be able to get a loan – but it may be at 21 percent! What you may not realize is that getting a high-rate auto loan like this can keep you in your bad credit status forever, since you’ll pay more overall, you’ll have a higher payment every month, it will be harder to make payments on time, and your credit score will suffer.  Your credit score might not have been too good when you bought, but what you may not know is that if you’ve been making payments regularly, even on that high-interest loan, your score has been improving.

If you get yourself an auto refinance loan, and pay it faithfully, you have the opportunity to raise your credit score, so the next time you go to make a big purchase, you may find your number higher than you thought.

It is easier than you might think to refinance auto loans.  Indeed, these auto loans for bad credit are easier to get than you may think, especially if lenders have convinced you that you do not deserve any better.

Nothing could be further from the truth.

In fact, many lenders, from Citibank to Lending Tree to many other lenders, are eager to refinance auto loans from other lenders and auto dealers. If a buyer has been repairing his or her credit score by paying off the original loan consistently, lenders will take a chance on giving auto loans for bad credit, at a better rate.

Refinance Auto Loans And Save

If you do decide to get an auto refinance loan, you stand to save more money than most people realize. You not only save money by lowering your monthly payment, but also if those who refinance auto loans do so early in the life of the loan, they can save thousands in interest alone. The difference, in interest, between a $16,500/60-month loan at 21% and 7% is almost $7,000! Just think what $7,000 extra could do for you.

You can refinance auto loans by applying online, usually for no application fee. You vehicle does not have to be appraised, but the amount to pay-off your loan must be between $7,500 and $30,000, and the vehicle cannot be any older that 7 years. Carefully research offerings and select the one that is best for you.

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