Car Loan Refinance

Posted in Car Loan Modification and tagged by admin

Car loan refinance is simply to trade off your old loan with a more favorable new loan. The new lender settles off your old loan and you shift the payments to the new lender. Same is the case with car loan refinance  in which a new lender pays off your car loan to transfer the title of the car to its own name and you make the monthly payments to the new lender.

Benefits of Car Loan Refinance
Car loan refinance can bring you a lot of benefit only if you handle it wisely and make your calculations properly. Benefits associated with refinance car loan include:

  • Refinancing provides you the opportunity to negotiate your car loan at a much better interest rate, flexible loan terms & conditions, and lengthen or shorten the loan term as per your convenience. This not only saves you money but also allows you to shift to a better lender in case you previously made a bad choice or the loan was provided by a car dealership with high markup rate.
  • Refinancing can help you retain your credit score in case you are at risk of not satisfying your current loan on time. Through refinance, you not only can pay off your current loan on time but also avail the opportunity to lengthen the loan term or reduce your monthly payment.
  • Refinancing can reduce your total debt if you can successfully negotiate it at a lower “Annual Percentage Rate” while maintaining the period left in the old loan term. This comes handy in a situation when your current loan is more than the car worth i.e. in upside-down loan.
  • If your current car loan is not in your name by any reason then you can put it under your name easily through a car loan refinance.

Car Loan Refinance Procedure

  • Search for the best car loan refinance available in market. Short list the ones that suit you best and provide you the benefit you are seeking in a car loan refinance.
  • Compare the rates, flexibility in loan term, and terms & conditions of the shortlisted lenders.
  • Choose the one that is more suitable and offers the best rate. Submit the necessary documents for loan qualification.
  • Pay out the incidental fees which may include state re-registration fees, lien holder fees or any prepayments if demanded by the lender.
  • Once your car loan refinance is approved, the lender will pay off your current loan.
  • The new lender attains the title of the car and you make your monthly payments to the new lender.