If you are not satisfied with your existing car loan, then you can consider getting it refinanced. It can save you on existing headaches and even get you a low rate refinance. Here is a guide that can help you refinance your auto loan:
Auto refinancing: Basic FAQ
A new lender gives you a loan by paying off your old auto loan creditor. He now gets the car as a security and you continue paying your installments to him. Why should you refinance your auto loan? There can be several reasons for going in for auto refinance. Here are a few typical cases: 1. You may have taken a loan bearing a high rate of interest in the first place, and now, you want to pay it off and take a low interest auto loan to save on interest. It is possible that when you availed the first loan, you were in no position to bargain, and now you are. Maybe, you just walked into the car dealership and signed whatever came your way because you were short of time. 2. Auto finance e-loans are now available easily and many sites, like Lending Tree have made it simpler for people to avail loans online. Your loan exceeds the value of the asset. That means, the market value of the auto is lower than the amount of loan outstanding. A refinance can help fix things.
How to get an auto refinance loan
1. Start checking on auto refinance options. Sites like LendingTree are a great place to start. You can compare different lenders’ features and interest rates and choose the best available option. 2. You must calculate if the new interest rate, the loan closure and new loan charges, and the seemingly low outgo work to your advantage or not. Also, check if the new tenure exceeds your existing tenure and calculate the losses, if any. Repayments may look low, but that may be because the tenure is stretched. 3. Once you choose your new lender, you have to submit an application that details your existing loan, financial information, and other information that the new lender requires. 4. Pay the required fees. You have to pay an exit fee (or, switching fee), as specified in the original agreement. Note that exit fees are payable if you exit the loan within a certain period. No exit fees are payable after the stipulated period. The other charge is legal and administrative fees, which are unavoidable. Sometimes, these fees are so high that an auto refinance becomes a loss-making proposition. 5. Once you take the new loan, your new lender repays your old car auto loan. And, you pay your revised installments to the new lender.