Can You Refinance a Car Loan With the Same Bank
Do you have a poor credit rating and are wondering if it is possible for you to refinance a car loan with the same bank that originally lent you the funds? Well, it absolutely is. Many times, those companies that you used to finance your automobile with, may be willing to help you once you have repaid the loan in full. In fact, many times they may be willing to waive or discount some of the interest that was due when you first took out the loan.
How does this work? It works like this. You take out another car loan to purchase a new one, but this time, you want to use your original bank as your financial institution. Your original bank will agree to allow you to refinance your car loan for a lower rate of interest as long as you use them to repay the loan. The lower interest rate that you end up with will translate into a lower monthly payment for you.
The key to getting approved by these banks when you are looking to refinance a car loan with the same bank that initially lent you the money is to have a few things in order. The first thing you must have is a current and clean credit history. This is an important factor when it comes to being approved for any type of loan. The fact is, the majority of lenders out there are very hesitant to extend credit to those who have a poor credit rating. They do not feel as though you are a reliable financial investment.
Secondly, you must also show them that you are making regular on time payments. Those with bad credit may have missed payments on their loan. This can cause your credit score to drop to an alarming point. The good news is that this is fixable and most lenders are willing to work with you.
It may sound like you are asking for trouble, but the truth is, most banks are anxious to work with those that have bad credit. After all, you are a potential customer and they are competing for your business. There are other requirements that you must meet as well. For instance, you must be at least 18 years old. You must have a job or some type of steady income.
When you are working with a lender, remember that you get approved at the beginning of the process. You will most likely have to pay an upfront fee for processing your application. It is important to shop around and see what type of terms are available to you. Make sure that you shop with several lenders before getting approved. Lenders want to see your application, but they may be reluctant to give you the best deal if you send in too many applications.
If you decide that you want to get approved for a loan to buy a car with bad credit, make sure that you can afford the monthly payments. If you go over your monthly payments, you may find that your credit score drops even lower. If this happens, you can find that it becomes even more difficult to get approved for any type of loan. Remember that the longer you wait to pay off the loan, the worse it will look on your credit report.
When you refinance a car loan, you will be able to take out a new loan at a better interest rate. If you have good credit, then it can often mean as low as half the rate that a person with less than perfect credit gets approved for. This can save you thousands of dollars over the life of the loan. It is important that you keep in mind that the interest rate you get approved with depends largely on the bank that you work with, so talk to the people at your current bank and see what they can offer you.