For most people, a running, dependable vehicle is not just a luxury- it’s a necessity. Whether you need transportation for work, to advance your education, or to run essential errands, like taking children to and from school and other activities, buying groceries, or making it to doctor’s appointments, for many men and women today, having a reliable vehicle is essential for day-to-day living.

Buying a car is expensive; in fact, for most Americans, after a home, a car purchase is the most expensive purchase they will ever make. Most men and women – especially in today’s economy – don’t have 20 to 25 thousand or more lying around in their bank account. Even a good, reliable used car can cost thousands of dollars. As a result, multiple loan agencies have developed out of the car industry to allow potential owners to buy the car they need on credit, making regular payments over time until the balance (plus interest) are repaid.

That’s a great system for those with good credit. But what about the thousands of men and women who do not have good credit? More and more, traditional auto loan sources have stopped advancing credit to men and women with even moderate credit scores, meaning that in this economy, buying a car is becoming more and more difficult.

For those individuals, there is hope. In response to the current credit crunch experienced in the U.S. and abroad, some auto loan financing agencies have developed a number of loan products specifically suited to address individuals with less than perfect – even poor – credit histories. And most of these companies offer products that do not involve ridiculously high rates. Finding bad credit auto refinance loans is again a possibility.

If you already own a vehicle but your rate is too high, these companies can also offer you loans with lower interest rates, which can have a substantial impact on your monthly payment.

There are a few keys to obtaining an auto loan with poor credit:

· First, your auto loan cannot exceed the value of your car or vehicle. A financing agency is not going to give you more than your car or truck is worth. Check first with a reputable source to determine the current value of your vehicle before applying for a loan.
· If you are refinancing, your new loan must be in the same name as your original loan.
· Have your auto information handy, including your insurance information and VIN number.
· Most companies offering these loans require a certain amount be financed –say, at least $7500; less than that and the loan will not be profitable for the company.

Warning: you may not like what I have to say in this article.

There aren’t a lot of reasons why you would want to use an auto refinance when you have bad credit. For one thing, the whole point of refinancing a loan is to get a better interest rate. However, I can think of one good reason and here it is: you might simply want to lower your payments by extending the length of your loan.

I’ve been paying on my auto loan for more than three years now. I took out a loan of about $25,000 and now only owe $10,000 on it. I’ll be done paying it off in a little less than two years. Since I only owe $10,000 on the vehicle I could refinance for a four or five year term (the bank would probably want me to do four) and lower my payments by quite a bit. I would of course have to make the extra payments.

My payment right now is almost $500 but I could probably get them down to about $200 with a refinance. Of course my credit is solid so I would have a good interest rate. If you had to use bad credit auto refinance loans you would have a higher payment on the same loan amount.

Securing An Auto Loan Refinance With Bad Credit

The method that you’re need to go through to secure an auto refinance will depend entirely on how bad your credit is. If you’re above 650 you’ll be able to secure the loan by yourself. Most banks would be glad to have you. Those of you that have a credit score below 650 will have to have some help to be able to secure the loan.

Finding a cosigner usually isn’t the easiest thing in the universe to do, but it can definitely be done. Ask family first because they will be the most likely to be able to and want to help.

If you aren’t able to find a cosigner, you’ll need to get your credit cleaned up. One of the most damaging things to your credit score is when you have high balances on credit cards. 30% of your score is calculated by looking at the balances you carry on your lines of revolving credit. That means that you could lose over 200 points if you have maxed-out cards. Paying them down in this situation will make a huge difference to your score. That way you’ll be able to walk into a bank and secure an auto loan on your own.