You bought a car some months back through a loan that you took at higher rate of interest. Instead of continuing high interest payments, you can reduce the monthly outgoings substantially on opting for refinance car loans.
These loans are typically meant for lowering monthly payments towards car loan. Your loan burden is thus reduced to a larger extent. The refinance lender gives a loan depending on the balance payments towards the existing car loan. The new lender pays off your current loan balance and receives the title to your car from your old lender. You are then required to make monthly payments to the new lender.
The borrowers' main motive behind Refinance Car Loans usually is lowering monthly payments. This can be achieved through refinancing at lower rate of interest. But why should the new loan come at lower rate? Well, it is because your credit rating may have improved in past few months as you have made regular and timely payments towards the car loan. With improved credit score, you are better positioned for availing lower rate of interest. Secondly, the market interest rates also may be down substantially.
Because of lower rates, you are likely to save lots of money on interest payments. You can use the savings for any purpose. Go for refinancing in the early stages of the car loan for greater savings. In the later years, you may not be benefit much as there are not much balance payments to make. But you must be the right candidate for the new loan.
For refinancing a car you must be a US resident of at least 18 years of age. Only those people will be approved whose monthly income is at least $1800. There are some rules for the car also. Lenders like to refinance those cars which are of 1996 model or of newer model. The car should not be too old and should preferably be of less than 80000 miles. Refinance car loans range between $7500- $50000.
Compare different refinance car loans lenders. Take their rate quotes for making a better comparison. Prefer online lenders as they offer loans at lower rates.
