So once you've gotten your loan, do you settle in for three years or more of sky-high payments? Not necessarily. The silver lining to these clouds is that there's an active and growing refinance market for auto loans. While the first several months of high-interest loan payments could be taxing, they may be easier to swallow knowing that you may find some release later.
Once you've established six months to a year of on-time payments, experts say, you're likely to find lenders who will refinance your remaining auto loan balance at more reasonable rates. Banks who might not have touched your business before will become possibilities. In particular, lenders like Capital One and Household may be lending candidates at this point, even if they turned you down the first time you applied.
By this point, breathe a sigh of relief. Remember, even if the loan is pricey, by this point you at least have a reasonable car (we hope!). That, at least, is progress. And when you're struggling to move out from under bad credit, every bit of progress counts.
