Getting a Better Rate When Refinancing Your Loan with Poor CreditInk Well Mag February 21, 2016 0 COMMENTS
Refinancing your loans is an attractive option these days, as interest rates are almost historic lows. Although rates alone don’t render a new deal favorable and make financial sense, you’d know a refinance is a sound move if you meticulously do your math.
Just because refinancing is available for you, it doesn’t mean you’re entitled to get a low interest rate. Even if some lenders provide you a bad credit refinance in Salt Lake City, Atlanta, and other major cities, it likewise doesn’t guarantee you’d get the rate you truly hope for.
That’s why you still need to make more effort to convince lenders that you can repay your new debt on time. AmericanLoans.com shares the ways you can make yourself look better:
Repair Your Credit
Sometimes, you don’t get the interest rates you want not because your credit score is bad — but because it’s that bad. Bad credit lenders don’t really expect you to have a spotless credit rating. Nonetheless, they might be less keen to let you borrow if you can’t even pass the low bar they set.
It wouldn’t happen overnight, though. Start improving your credit-worthiness by correcting the errors on your credit reports and never being late on your bills.
Have Enough Show Money
Your credit history may show that you’re not the ideal borrower in the world, but putting a considerable amount of money in your bank account can give lenders some confidence in you. Combining all of your liquid assets on hand can help your case when managing the debt you intend to have.
Find a Co-Signer
If your credit isn’t good enough, someone else’s might change the minds of certain lenders. Lending companies always love to have an additional fallback should you default.
Refinancing isn’t that straightforward if you have poor credit, but you have options. Unless you do what’s necessary to persuade lenders that you’re not trouble, the rate you’re eying might remain a distant dream.