Apr
4
Bad Credit Auto Loan Refinance
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A bad credit auto loan refinance application is less common than a bad credit auto loan. However, it is possible to benefit from refinancing your bad credit auto loan to lower your interest rate and get better terms. If you have been making your payments on time it is very possible that if you submit an auto loan refinance application you could save a lot of money.
If you once had bad credit and you have reestablished your credit by making your auto loan payments on time, it is worth your time to consider auto refinancing.
The longer you wait to submit your refinance application the more money you will pay in the long run. For example, lets say that you financed a bad credit auto loan two years ago with the following terms:
Interest Rate: 19.95%
Original Balance: 19854.02
Payments: 72 months at: 478.48
Total Interest Paid: 14450.35
Total Cost of Auto Loan: 34,304.37
You can see that your challenged credit auto loan interest rate is very high, and the interest associated with that rate is also very high. Over the course of six years you will pay a lot of interest to the lender!
However, if you refinance your bad credit auto loan with a company like StraightAway.com, you could qualify for good auto loan refinance terms. This is a hypothetical situation, but lets say after two years of paying your bad credit auto loan, the terms of your new loan are as follows:
Interest Rate: 12.95%
New Balance: 15,737.45
Payments: 48 months at: 421.81
Total Interest Paid: 4509.23
Total Cost of Auto Loan: 19,994.71
Amount Saved by Refinancing: $7088.76
Payment Was Lowered by $57
In this hypothetical case, your bad credit auto loan refinance lowered both your payment and your interest charges quite a bit.