How to Refinance a Car Loan with Bad Credit

Refinancing a car loan can be a smart financial move, even if you have bad credit. It can help lower your monthly payment, reduce your interest rate, or adjust your loan term to better fit your budget. At Northwoods Credit Union, we believe in helping our members achieve financial stability—because loans given mean dreams are realized. If you’ve struggled with bad credit but need a better car loan, here’s what you need to know.

Steps to Refinance a Car Loan with Bad Credit

1. Check Your Credit Score

Before applying for refinancing, check your credit score to understand where you stand. Even if your credit isn’t perfect, some lenders (like us at Northwoods Credit Union) work with borrowers who have lower credit scores.

2. Take Steps to Improve Your Credit

While you may still qualify for refinancing with bad credit, improving your score can help you get better terms. Consider:

• Paying bills on time
• Reducing credit card balances
• Checking for errors on your credit report and disputing any mistakes
• Avoiding new credit applications before refinancing

3. Use Our Financial Calculator

Before applying, use our auto loan calculator to estimate your new monthly payment. This tool can help you see how different loan terms and interest rates may impact your budget.

4. Gather Necessary Documents

To streamline the refinancing process, have the following ready:

• Proof of income (pay stubs, tax returns)
• Vehicle details (VIN, mileage, current loan information)
• Proof of insurance
• Credit report (optional, but helpful)

5. Review Loan Terms and Sign*

If approved, carefully review your new loan terms. Look at:

• The interest rate
• Monthly payment amount
• Loan term length
• Any fees or penalties

Once you’re comfortable, sign the agreement and start enjoying the benefits of your refinanced loan.

Why Choose Northwoods Credit Union for Auto Loan Refinancing?

At Northwoods Credit Union, we take a people-first approach to lending. Our philosophy is simple: Loans Given, Dreams Realized.

• We try to say yes when others won’t. If your credit isn’t perfect, we’ll still work with you.
• Local, member-focused service. We understand the financial challenges of our northern Minnesota community.
• Lower rates and flexible terms. We offer competitive rates designed to help our members save money.

Ready to Refinance Your Car Loan?

Refinancing your auto loan—even with bad credit—can be a step toward financial relief. Visit our auto loan page to learn more, or stop by one of our branches to speak with a loan officer. Let’s find a solution that works for you!

*Not all applicants will qualify. Membership eligibility required. NCU is insured by NCUA.