You may have heard of car loan refinancing, but not quite sure what it is or even how it works.
Find out a bit more about it today to see if it can help you make life a little bit easier.
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We are here to help answer some of the questions you may have about the refinancing a car loan process, to see if it is an option for you as a way to help save money.
What is car loan refinancing?
Car loan refinancing is a secured loan that is used to help pay off a current car loan.
The car itself is used as security for the new refinanced loan.
The new loan continues to have a fixed interest rate as well as fixed monthly payments for the term of the loan.
How does car loan refinancing work?
It basically works by replacing the current car loan with a new one.
This however means you are taking out a new loan with different terms. With the new car loan you will pay off the current car loan.
Why would I want to do car loan refinancing?
There are many advantages of doing this, mostly because people save money.
This could be done by lowering their monthly payments or by reducing the interest rates, as well as shortening the term of the loan so that it is paid off quicker.
Make sure before refinancing that what you are hoping to get from it will be the outcome.
When is the best time to carry out car loan refinancing?
This really depends on your circumstances.
If you have been working hard on improving your credit rating, then you may be able to refinance for a better interest rate on a loan.
If you are in the position of needing more cash each month by refinancing it may help lower the monthly payments.
If interest rates in the economy fall it may be a great time to take advantage of the better deals that are available compared to your original loan.
Where do I go for help to do car loan refinancing?
When you have decided that the best option for you is to refinance your car, the best place to look is right here.
We have a range of lenders that will be able to help and advice you on the best loan to suit your circumstances.
Just click on the links on this page to be taken to them.
Just be careful to do your sums before you would opt for refinancing your car. Remember, when you get a settlement figure for your existing loan, it will still include some interest charges.
If you take the balance of your existing loan and transfer it to a new loan, you are really paying interest on top of interest.
Having said that, if you get a good enough rate on your new refinanced loan, then you could still be better off switching lenders.
See also Car Logbook Loans.