Posts tagged: auto refinance for poor credit

Auto Refinance for Bad Credit


Let’s not kid each other. We both know why you’re looking for a bad credit auto refinance loan. I’m guessing it went a little something like this:

A couple years back you started a new job, and it paid double what your previous job was giving you on a monthly basis. Suddenly, you decided that income was bullet proof and it was time for you to start living the life you had dreamed about and so obviously deserved. You went right out and bought a $60,000 SUV and immediately put $5,000 worth of rims and tires on it, not to mention the aftermarket entertainment system. You never felt cooler pulling up to your weekly softball game with your buddies; you were finally living the dream. But oops – the dream carried a $1200 monthly payment.

Next thing you knew, things started to go a little sideways at work, and you missed a couple of those $1,200 payments. You went from being Mr. Shiny Credit to  Mr. I need an auto refinance for bad credit. Not too fun is it?

So what are your lenders going to be looking for when you try to get that refi done? Well, first of all they’re going to want to look at your overall debt profile. In the months since you started missing payments what have you done to improve your situation? Have you paid off any of your consumer debt? Have you reduced your overall debt at all? Has your income stabilized?

These days your lender will probably want to see at least three or four of your most recent pay stubs, and if you’re a commission-based earner they’ll want to see even more than that (after all, any salesman can have three or four good weeks. I’ve been there).

Once you’ve shown that you actually produce enough money to keep your payments current after you go through the auto refinance with bad credit, you better prepare yourself to see a pretty gnarly interest rate. I’m sure you understand that being a bad credit borrower you’re now facing double-digit interest rates at a minimum. It’s not out of the question to pay over 20% on your car loan after the refi. Can you handle that? I guess you don’t really have a choice.

Hopefully you’ve learned this lesson in life: those that create the appearance of having the most money very often have nothing except the most debt and stress. People who choose to live life driving used cars in and living well inside their means may not look like much, but they have more fun and they sleep better at night.