The only thing better than lowering your monthly car payment would be to not have one at all! Of course, for most working folks this is simply not possible.

You can however consider refinancing your very high interest Bad Credit Car Loan to a lower interest rate if you meet these conditions:

- You have kept the car for at least 1 year

- All payments have been on time

- The value of the car is more than what you owe

If this is you, then it's time to consider getting out of that high interest "bad credit" car loan.

If you were locked into the high double digit interest rate (18%- 25%) on the original car loan because of poor credit or no credit, then your 1 year of solid payments may be enough to bring that ridiculously high interest rate back to the single digits.

This is well worth your effort as you can save possibly over $100 per month depending on the vehicle you purchased.

These 3 guidelines will greatly help you save time and probably money if you want to refinance your bad credit car loan.

1. Have Your Credit report...In Hand!

You'll want want to run your own credit report. Dealers many times play games with your credit score. The fact is, if you don't have your credit report in hand to disprove the dealer or auto lender then you'll have to accept your credit score as presented by them. Do yourself a favor and run your credit report yourself (see link below)

2. Know the Value of Your Vehicle

An appraisal isn't a requirement to refinance your car loan, however some dealers won't process a re-fi unless your car's value is at least $7000. It's a simple process to find out the current value of your vehicle via a Kelley Blue Book or Edmunds online. Remember, "the pay off" (amount you owe) and the "market value of your vehicle " are two different things.

3. Shop Many Bad Credit Auto Lenders

I say this because, although your credit may not be as bad as when you originally purchased the car, you may still be considered "sub prime". However, there's a big difference in a 550 (very bad) and 650 (moderately damaged) credit score.

Remember, one year of on time payments proves that you can "manage credit" and may qualify you for a program that offers "single digit interest rates", although these are not prime rates they're certainly not bottom of the barrel either.

So keep these 3 tips in mind while making sure you get a good selection of bad credit lenders working with you, competition is what keeps lenders honest.