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Refinance car loan – When you need it?


You are almost finishing paying off your car loan and you received a call from your creditors asking you to consider a refinance car loan. Often they will give you a deal sounds like a good deal. Extra cash, low interest rates, and easy payment are what attract the most. Now ask yourself, do you really need these? If the interest rate has no big different and you are not urgently need cash, don’t get your ass itchy and start to pay your car loan again.

Well, not everyone needs it but there are some situations where one needs refinance car loan. Here we sort out the top three situations that could convince a person to consider refinancing his or her car loan.

1. You are paying a high car loan interest rate. If your current car loan rate is very high compared to what the creditor has recently offered you, you may consider refinancing your car loan. Sometimes, the rate you are holding is high is because the APR rate is high during the time you buy your car. The rate dropped after few years so it could probably good for you to refinance your car loan. Hundreds of dollars can be saved from the loan. Other than that, it could be a mistake by signing up high interest rate car loan when purchasing a car or imperfect credit history during that time and led to extremely high loan rate. Therefore, it is worth considering refinancing the car loan.

2. Cash needed. Well, most of the Americans are credit challenger. Therefore, sometimes cash is needed urgently. A personal loan usually has sky high interest rate. For example, a $10,000 loan could have an interest rate up to 18% a year. In this situation, if you have a car that could refinance for $10,000 cash at any rate lower than that, why not? In the end you will get the cash of $10,000 but just in different way. Imagine that the interest rate to refinance car loan is only 9%, you could save up 9% which is A LOT!

3. When you have other loan that is higher than car loan. There are many loans which have higher interest than car loan in certain situation. For example, mortgage loan, home loan, business loan, personal loan, housing loan, or even study loan. If you are serving one of these loan and car loan, you could consider refinancing car loan and paying off full or part of these loans. Refinancing car loans into home loan require some studies but it is worth to do so because thousands of dollars could be saved at the end of the day although there are some costs to refinance a car loan.

These are the only three reasons where one really needs refinance car loan. Often there are more situations where we need to sell our car to banks and creditors, get cash from them, and pay them back monthly. The more you calculate, the more you save. Consider properly before signing up any loan.


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