Refinancing Your Current Auto Loan
What is auto refinancing? Refinancing a car is a similar concept as refinancing a home. When you refinance a car loan, you pay off your current car loan and replace it with a refinance car loan with a new lender at a different (generally lower) rate. If you have purchased a car and were given a loan with a high interest rate, you may want to think about refinancing your auto loan for a lower interest rate. Refinancing your existing car loan can save you money each month by lowering your car payments.
Is an Appraisal Needed to Refinance a Car Loan?
Some people think an appraisal is required to refinance their auto loan. This is not true. When you refinance your home, you do need to have an appraisal since the loan is based on the equity in the home. With auto refinancing, the loan is based on how much money you need to pay off your current car loan, not on the value of the car.
Bad Credit Auto Loan Refinance
If you had credit problems, refinancing a car loan might be a good option for you. You may have accepted an auto loan with a high interest rate because of a bad credit history. But, if you have maintained a stable job since you bought the car and have been making consistent, on time payments for a year or more, you may be able to lower your current interest rate. It's worth looking into it.
SOURCE: HSBC Auto Finance Article
