Bad credit auto loans are for those who have attained bad credit by late and/or missed payments. Bad credit auto loans can be used to purchase a new vehicle while re-establishing your credit history. These loans are usually short-term and their repayment period is usually anywhere between 48-60 months. Before applying for a bad credit auto loan, you should determine your credit score. A credit score of 650 and below is seen as bad credit. Borrowers with poor credit are usually offered high interest rate auto loans. Next, you should do some research to find a lender that you can trust. The Internet can be used locate lenders dealing in bad credit auto loans.
The interest rates for bad credit auto loans are obviously going to be higher than the interest rates associated with a good credit car loan. However, if you show a positive payment history for your auto loan, you can refinance this loan with the same, or another company after one year. When you refinance an auto loan with bad credit, you can obtain rates that are considerably lower than the loan you first received. The fees associated when you refinance are minimal. Typically, all you will have to pay is a transfer fee and a state fee. The fee ranges between $5 - $10. The state fee can be between $5-75. The transfer fee is usually $5-$10 and the state fee is usually $5-$75. Refinancing your existing car loan is definitely something you want to consider if your interest rate is anything over 10%.
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