Can I refinance a car loan if I have poor credit?

I have a credit score of only 550, but I want to get out from under the 21% interest rate that's on my car. Am I still a candidate?

Answer
Refinancing a car is always a good move if you want to reduce your interest rate—especially considering yours sits at a whopping 21%.
However, a credit score of 550, and likely a considerable amount of negative equity on your car loan, means that you probably won’t be able to find a lender to refinance your car loan.
Instead, you should focus more on rebuilding your credit and paying your car loan on time. Start by paying off any delinquent accounts and extra debt that has the highest interest rate. Next, make additional principal-only payments on your car loan so you can pay down the negative equity.
Continue to do these things and within a year or two, you should be ready for refinancing to a far better rate.
In the meantime, you can save money in other ways. Set a monthly budget, cut your expenditures, and check to see if you can save on car insurance. Sign up with Jerry to compare your current rate to up to 50 other quotes to get the best rate and save the most money.
Eric Schad
Answered on Nov 03, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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