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The Secret Weapon -Bad Credit Auto Refinancing Loan

We recently received an enquiry from an uninformed consumer who didn’t know that a bad credit auto refinancing loan existed!

Hello there.

I’ve suffered from bad credit in the past and when I needed a new car I had to take out a bad credit car loan. The interest rate is really high, but I have made sure that I have kept up with my payments religiously. Is there anything I can do to reduce the interest rate and the monthly repayments? I would like to have a little bit more cash in my back pocket!

Our reply:

Congratulations on keeping up your repayments!

The key to reducing you car loan repayments is to take out a bad credit auto refinancing loan. We tend to refer to this as the secret weapon of reducing car loan payments - even if you do have bad credit!

A bad credit auto refinancing loan is a new loan agreement that will simply pay off your existing bad credit car loan with a new loan with a lower Annual Percentage Rate (APR).

Things to remember:

  1. The 1% rule. If a bad credit auto refinancing loan doesn’t provide you with a lower interest rate of your current car loan of at least 1%, it ain’t worth switching!
  2. Online lenders will normally have lower rates as they have lower overheads.
  3. Check that there aren’t any prepayment penalties with your current loan. This could make switching the loan more expensive than keeping it.
  4. When applying for a bad credit auto refinancing loan make sure that you use exactly the same information you did to your previous loan company, with no discrepancies.
  5. Do it sooner rather than later to save yourself loads of money on interest. 1 year is the golden rule of thumb. Now you have shown that you can repay the loan with a high APR for a year you should be able to get a bad credit auto refinancing loan at a lower rate than your previous deal.

We hope this helps you!

As auto loan refinancing has increased by 75% in the last two years then perhaps a bad credit auto refinancing loan isn’t so much of a secret weapon any more! We have certainly unwrapped the secret for you and anyone else who may be reading this!