When applying for car loan refinancing, there are a lot of factors that your lender considers, including your credit score, the time remaining on your original loan, etc. However, your credit score has the most weight-age among all these factors. It shows your current financial situation to the lender so they can decide whether or not to go ahead with refinancing.
If your credit score has improved in recent years and is currently 600, you may be wondering, “can I refinance my car with a 600 credit score”? Read on to find out whether a credit score of 600 would be enough to refinance your car loan.
Can I Refinance My Car with a 600 Credit Score?
Your credit score plays a major role in determining whether or not your lender will approve your refinancing application. It also impacts the interest rate that your lender offers. So the higher your credit score, the better interest rate you will get.
But what is a good credit score for car loan refinancing? Is a credit score of 600 enough? Let’s see how lenders categorize your credit scores:
- Exceptional: 800 – 850
- Very Good: 740 – 799
- Good: 670 – 739
- Fair: 561 – 669
- Poor: 300 – 560
As you can see, a credit score of 600 lies in the “Fair” category. Although lenders prefer credit scores under “good” and higher categories, you can still qualify for auto loan refinancing. However, you may not get the best interest rate for this credit score.
So if you are planning on applying for auto loan refinancing with a credit score of 600, you may want to wait a couple of months and apply when your credit score reaches the “good” category. This way, you will get a much better interest rate.
But if you can’t wait that long, you can still apply with a credit score of 600, as some lenders have a minimum credit score requirement while some other lenders don’t. You may get a higher interest rates, or bring on a co-signer, it all depends.
Other Factors That Determine Your Car Loan Refinancing
Some other things that determine the likeliness of your refinancing application being accepted include:
- The loan amount
- The age of your car
- The loan term
- Your employment status
- The credit score of a co-signer (if you have one).
Some lenders don’t have a set minimum requirement when it comes to your credit scores. So no matter what your credit score is, reach out to a number of lenders near you and determine if they are willing to take on your application.