How to refinance a car loan with bad credit?

Get clear on what your credit situation actually is. Order copies of your credit reports (you can get one for free each year from the three credit reporting companies) and review them to make sure everything is accurate. If not, you?ll want to resolve inaccuracies before applying to refinance.
Check your credit score. There are many free credit monitoring tools (your credit card company may provide one). According to Credit.org, the credit score ranges break down as follows: 300-550 (poor), 550-620 (subprime), 620-680 (acceptable), 680-740 (good), 740-850 (excellent).
Check with your current lender to see if you can refinance with them. If your credit score has improved or you?ve made a few on-time payments in a row, your lender could be willing to do what it takes to keep your business, including releasing your cosigner and/or refinancing your auto loan.
Shop around. You should be able to apply for auto refinance loans through several lenders without doing more damage to your score?most credit scoring models count multiple loan inquiries as one if they?re close to one another.
Look for credit score indicators. Many lenders will share a credit score range or minimum credit score in their FAQs or elsewhere on their site. If you?re in the subprime or poor credit category, loan options that are clearly marked ?bad credit? or ?subprime? will be easier to obtain?just watch out for higher than average interest rates and fees.
Pay close attention to loan terms. Remember to compare all the terms and fees, such as prepayment penalties, late fees and closing fees. If you?re refinancing to save money, you may want to choose a loan with a shorter term vs. a longer one, which is typically higher interest but can reduce your monthly payments.

Darryl founded Smith Financial Advisors Inc. in 2006 after over 30 years experience in financial services including Mergers & Acquisitions, Investment Banking and traditional Commercial Banking activities at Bank One. Smith Financial Advisors is a Registered Investment Advisor in the State of Illinois. The firm specializes in Investment management, financial planning, and retirement planning.