How to Refinance with Poor Credit and Low Income

If you have poor credit and a low income, refinancing a debt will be challenging. Lenders typically only offer you a better deal on a loan if your credit and income have gone up. Knowing this will be a challenge, you have a few options to get a better deal.

Opt for Variable Rates

Variable rates can be expensive over time and are highly risky. However, they do allow you to get a low interest rate and low monthly payments in the beginning of the loan when you need the assistance most. If you have reason to believe your income will go up sharply in the near future, if you are graduating from medical school for example, then you may be willing to take the risk.

Seek High Risk Alternatives

You can seek high risk personal loans to pay off your existing debt. If you secure one of these loans with collateral, you may be able to find better options on the financing such as lower rates and lower monthly payments. You will be assessed fees and your credit score will drop when you prepay on the initial loan. However, this may be the best option for you if you do not qualify for a direct refinance.

 

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