Introduction
The global economic problems have caused a lot of people to have bad credit now. As such, you may not have the money that you used to have in order to make sure that you can pay all of your bills on time, all of the time. One way in which to get out of debt faster is to refinance bad credit loan. However, you may be thinking that since you have poor credit you won’t be approved for refinancing. This isn’t always true though.
Step 1
Talk to the lenders with whom you currently have your loan. Make sure that you speak directly with a loan officer about refinancing the loan that you currently have. Sometimes this means that you will be able to deal directly with the lender whom you already have and that they may be able to offer you refinancing that will actually lower your monthly bills. This may extend the life of your loan by at least a year, if not longer. However, your monthly bills will be lower whenever you refinance bad credit loan.
Step 2
If your current lender isn’t willing to work with you, then look for a lender who specializes in refinance bad credit loan. Two companies that specialize in this are Lending Tree and K Street Loans. You can actually go online to their website and enter your information to see what type of rate you’ll receive for free. Keep in mind that this rate isn’t set in stone though. So you’re going to need to talk to a lender in order to get more information.
Step 3
Be honest whenever you’re filling out the application for refinance bad credit loan. You need to provide your true credit score on this application form. Even if you have a low credit score you still need to report it accurately so that the company will be able to provide you with accurate information. Unfortunately though, it is this credit score that will determine the rate of your refinance bad credit loan. So with a bad credit score you can expect to pay higher interest rates.
Step 4
Continue paying all of your bills on time for 2 years. This will help you start to improve your credit score. At the end of these 2 years your credit score will be higher and you will be able to refinance bad credit loan.
Step 5
Whenever you are finally able to increase your credit score to over 600 you will no longer need to worry about having bad credit when you refinance bad credit loan. You will now be able to qualify for a much lower rate. It will actually be several percentage points lower. Of course, this will depend upon numerous factors such as the refinance company you choose and your current credit score.
Tips and Comments
Don’t be in a rush to refinance bad credit loan. While it may seem like the smart thing to do, you may be better off increasing your credit score before doing so.
