How to Refinance an Auto Loan with a History of Bankruptcy
Refinancing an auto loan can help you lower your monthly payments and sometimes help you get a lower interest rate. Refinancing may be more difficult for consumers with a history of bad credit or bankruptcy, but it is certainly not impossible. Learn how to succeed in refinancing your vehicle if you have had a prior bankruptcy.
Other People Are Reading
Instructions
-
-
1
Contact your current lien holder (the bank that made your auto loan) and request an early payoff quote. You need to determine the minimum amount you need to refinance to clear the current loan.
-
2
Determine the approximate value of your vehicle. Most banks use NADA trade value as a guideline to determine how much they can loan on a vehicle. If the value of your vehicle is more than the current payoff, you may be able to borrow additional money against the vehicle. If the value is less than the payoff, you may have a hard time refinancing. Each bank has different guidelines, but most refinance loans will be limited to around 100 percent of the value, possibly less with a history of bankruptcy.
-
-
3
Visit several banks and lending institutions to apply for a refinance. You will need to bring your current payoff amount, proof of bankruptcy discharge, proof of monthly income and identification.
-
1
Tips & Warnings
Don't go with the first bank that approves you. Shop around to get the best rate. Just because you have a history of bankruptcy doesn't mean you have to be taken advantage of. Be a smart shopper and compare all of your options. If you have trouble getting approved for a refinance, try asking a family member or close friend to co-sign for you. Try some reputable online lenders, such as Capital One Auto Finance or E-Loan, if you have trouble obtaining financing.
Resources
- Photo Credit http://freedigitalphotos.net
