Auto Refinance Bad Credit

Just about anyone can buy a car and get financed, regardless of their credit history. Dealers can work wonders when it comes to getting people financing to purchase a new or used car. Unfortunately, those financing deals for people with bad credit carry very high interest rates that make payments higher than they need to be. Fast credit independent dealers have overpriced cars and overpriced credit.

If you were caught up in buyer’s fever and signed onto a bad credit high interest loan, it is time to do a bad credit car refinance loan. Interest rates for bad credit auto refinancing from some lenders is still high but not astronomical. Just because you have bad credit it does not mean you cannot find a better interest rate to refinance your bad credit auto loan.

The best way to auto refinance with a bad credit history is to check with your local credit union or bank first. These are the most legitimate lenders out there and they will have the best rates. Car dealers and other lenders have middlemen involved and they may also jack up the price of a vehicle way over what it is worth. Other lenders feature “no credit check” and operate similar to cash advance stores, except they put a lien on the car for security collateral interest.

As long as the car is worth more than the loan you need, there is no credit check but interest rates will be higher than those from other financial institutions. This is especially true if the amount you want to borrow is lower than the worth of the car; in that case you are getting an equity loan.

Average used car loans today, according to Bankrate.com, are the following for persons with good credit:
• 36 month – 5.42%
• 48 month – 6.17%
• 60 month – 6.67%
They offer a 1% discount if you set up automatic bank deductions for payments and there are no application fees. Rates vary somewhat by state; the above are quoted for Oklahoma City, OK.

Compare the above Oklahoma rates to these national rates for regular loans used to purchase used cars:
• 36 month – 6.76%
• 48 month – 6.42%

If you went to a “buy here, pay here” used car dealer for your original loan, you could be paying up to 24% interest on that loan due to your bad credit history. This is definitely a loan you want to refinance and get rid of.

For an auto bad credit refinance loan, hurry to a credit union or bank and talk with them. Do not go online and ask for “quotes” or your credit record will be hit with numerous inquiries that will make it even worse.

Another good idea is to pull your credit records from www.annualcreditreport.com to see what is in them and make any needed corrections. Even if you have a sky high interest rate on your current loan, by the time you have made about six monthly payments, you should be in a good position to get better bad credit auto refinancing and reduce those high rates to something more manageable.