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Loan Refinance Guide

Refinance Bad Credit Loans How To Refinance Loans with Bad Credit

There are a number of ways to refinance bad credit loans that borrowers can consider if you have a bad credit rating but want to get out of debt fast. Using bad credit refinance programs, you can consolidate all your loans or get help to get rid of your high interest debts to lower your monthly payments for fast effective relief. How you use a bad credit refinance loan to restructure your debts will depend on your situation, choose the method that fits your needs best.

OK, a bad credit refinance won't exactly rain money, but the monthly savings you achieve can feel like it, read on to find out how...

How and What Loans to Refinance

Remember, these loans will vary in terms based on how bad your credit scores are. It is expected that borrowers with lower ratings will pay a higher interest rate and face more rigorous application requirements because your loan is considered high risk for the lender. While it may be frustrating and overwhelming to even look at the figures, it is best to start now, begin the refinancing process to restructure what you owe and begin the process of fixing your credit.


Debt Consolidation Refinance Loans

If you have several loans, high interest credit card debt is a perfect candidate, applying for a debt consolidation loan will reduce your costs. Check out our recommended debt consolidation loans that provide easy approvals for people with bad credit. If you are not a good financial planner, don't fret this loan will simplify things for you. When you hold multiple debts, each will have its unique repayment dates, terms and conditions that you must follow as the borrower, and costs.

Refinancing your bills with a single consolidating loan helps simplify the management of your debt as well as lower your bills. Following your bad credit refinance with a consolidation loan you can rest easy with only one loan to manage and keep more money in your pocket from month to month..

If you are having difficult time paying for your monthly bills, you can extend your repayment term by refinancing and achieve a significantly lower monthly payment over a longer period. Once you refinance bad credit card debt you can focus your extra savings to pay down your balance faster, reducing how much you pay towards interest. Easing the burden of your monthly bills helps you pay your bill diligently on time each month you can start improving your bad credit rating and get back on financial track once again.


Home Equity Loans

Home equity loans allow borrowers to refinance and borrow against the value of your home. This is a great option if you have an existing mortgage and would want to pay off all your high interest credit card balances, car loan or any other existing loans. The more equity you have built in your mortgage the greater the amount you will be able to borrow with your home equity loan.

Your home equity value is the total value of your home less the amount of your existing mortgage balance. With this loan it is advantageous to refinance any debts that are of a higher less favorable interest rate. After you refinance, bad credit ratings will rise as you start making on time consistent payments again. Most lenders will approve applications with a FICO of 640 or higher, or will work with people who have bad credit if you have have significant equity in your house.

Interest Only Mortgage Refinance

Refinancing your mortgage to be interest only involves restructuring your current mortgage with a new one that allows for payments to cover only the interest of the balance you owe. The principal amount will stay intact equity will not accrue from month to month, in other words you make no headway towards paying off your loan. This is a good option if you know that your situation will be better in coming months and you can use the financial breathing room lower required bill payments can provide. 3

An interest only mortgage refinance will have a low bill payment for the first few years depending on how your loan is structured. However, a balloon is common the interest only grace period in which you need to start paying more. A bad credit refinance to an interest only loan buys you time, but it can be dangerous so carefully understand the conditions of the refinance you are signing. A mortgage refinance typically applies only to your home loan and unlike a home equity line the loan amount cannot be applied to other debts.

Refinancing Options


Banks are still a viable option refinance loans even for people with bad credit. While people think that banks do not approve bad credit borrowers, it is not always the case and it is worth a try. Banking institutions do have a more rigid qualification process compared with other financing options, but your local credit union or bank can sometimes have refinance programs designed for people with bad credit. In most cases a bank will not be your best option to refinance bad credit debt, but it is the fist place we recommend you start looking.

FHA Bad Credit Refinance

The Federal Housing Authority has several programs to help people with bad credit ratings refinance and get back to a sound financial footing. If you are 4

looking for bad credit mortgage refinancing, FHA possibly has a good option they are government incentivized to provide bad credit loans. In addition, the government backing allows for their providing attractive loan to value amounts and interest rates on money they lend. The maximum loan amount that you can get from FHA will be based on your debt to income ratio. The minimum FICO rating required is typically 620, though presenting your case with worse credit can be reviewed. They offer different refinancing options and home buying loans, you can opt for either a traditional first mortgage, a second mortgage or interest only type of loans.

Sub-Prime Lenders

Sub-prime lenders are are more available online and offline and provide easier refinance qualification standards to allow for working with bad credit people. These are financial companies that provide subprime loan options especially for people with a bad credit history. The refinancing options these lenders offer varies dramatically from company to company. Generally you will be expected to provide collateral, guarantors, security deposits and will ask a higher interest rate to refinance bad credit debts.

Hard Money Loan

Hard money lenders provide short term, little to no qualifcation required loan options. A hard money loan is typically used as a short term solution to acquire the cash needed to get a bad credit refinance approved with a traditional 5

lender. We recommend a number of bad credit personal loans in cases you need emergency money fast, but they are not recommended for long term borrowing. Because of the very short term borrowing periods they are sometimes referred to as bridge loans. A hard money loan is usually very expensive and should not be considered for any long term financing because of the expensive high interest costs. If anything we recommend you refinance hard money borrowing as soon as you are able.

Friends and Families

Ultimately, family and friends are also a source for money to refinance bad credit debts. Though it may leave you feeling a little queazy to borrow from Aunt Gertrude or Uncle Billy, you typically will not get a better interest rate or lower borrowing costs than borrowing from friends and family to execute an effective bad credit refinance strategy. Just don't let them down, pay back what you borrow, and thank them graciously for the help when you get back on your feet.

If you would like more information you can visit our recommended bad credit debt consolidation offers, we review consolidation loan providers that you can use to refinance bad credit card debt that provide the best rates, easy approvals, and fast loan funding, get started today...

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Loan Refinance Guide  

OK, a bad credit refinance won't exactly rain money, but the monthly savings you achieve can feel like it, read on to find out how... Loan R...