There aren't too many options in regards to refinancing a car loan with bad credit. Most motor financiers won’t even allow a refinance of a standard car loan. There could be ways around this though, as long as your current bad credit car loan has been conducted well and you have not had any missed payments when they were due. However, it’s unlikely you’ll be able to keep your current car and refinance your loan.
An option to get a better deal
The simplest option is to trade in your current car to payout your existing bad credit car loan. You can then look at financing a replacement vehicle. You might look at replacing your vehicle with a cheaper option to help reduce the size of your lend. Provided you conducted your previous loan perfectly you might find that you have more options and access to lower rates than on your previous loan, but this will depend on your individual circumstances.
What is ‘Correctable Credit’?
Correctable credit is the term used when a client that previously had poor credit history was able to improve their situation by perfectly conducting a bad credit loan after the credit issues appeared on their credit file. This could show lenders that the client has learnt from their mistakes and are ready for another chance.
Once lenders can see that you have had “correctable credit”, a lot more options could open up, which may allow you to negotiate a better car loan deal.
The only other option would be to apply for an unsecured personal loan to payout the bad credit car loan. Often these rates are higher than standard car loans, but could still be less than many bad credit car loan interest rates. The only problem with this option is that it could be more difficult obtaining approval for this kind of financing, especially if you already have outstanding debts.
CarLoans.com.au can provide you a free car loan assessment, this assessment will determine what loan product suits your needs best as well as providing you with the interest repayments.