Refinancing your car can greatly reduce the monthly payments and the interest involved in a loan. However, refinancing a high mileage car is a different story. Lenders are not usually willing to provide loans for a high mileage car for they may consider it as a high risk vehicle. Despite this condition, you can still refinance a high mileage car by following the useful steps enumerated below.
1. Check your credit report if you already have the copy. I case you don’t have one, secure a copy from one of the three financial reporting agencies and check your credit score. The number of loans offered depends on the credit score you own. In case your credit score is high, this could mean that you might have a good time looking for refinancing loans.
2. Check your FICO score for this determines your credit worthiness. The fico score is a three-digit number between 300 and 850. In case you have a FICO score of 720 or higher, this simply means that you are a good creditor.
3. Try to find your car’s current value. You can use the Kelley Blue Book as a guide. This book is the main tool usually used by lenders and dealers to come with accurate value of cars. Upon knowing the car’s current value, compare this with your existing car loan balance. In case the value of the car is lower than your outstanding loan balance this could mean a greater challenge.
4. Avoid applying for high mileage car refinancing from banks and credit unions. They would probably turn you down because of the vehicle’s mileage condition. Consider submitting loan applications to finance companies such as Capital One Auto. Make sure to provide the required documents to hasten the process of pre-approval.
5. In case you were not able to obtain refinancing for the car, try getting personal loans with lower interest to pay for the car loan remaining balance.