Car Refinance

by : Ken Marlborough

Car Refinancing is the process by which someone pays off an existing car loan by borrowing a new loan. On his part, the new lender pays off the old loan on condition that the title of the borrower's vehicle, for the purchase of which the first loan was taken, is transferred to the new lender until the loan is repaid in full. Just as in mortgage refinancing, consumers go in for refinancing to get their interest rate or monthly payments reduced.

The first thing that the borrower needs to do is review his existing financial situation. This determines the chances of a Car Refinancing loan. The borrower can do this by calculating total expenses and income, and finding the difference.

Concerning refinance processing fees, there are two types: Transfer of lien holder fees (which is usually from $5 to $10) and state re-registration fees (which may come anywhere in between $5 and $75). These are only estimated fee figures. These two fees differ from lender to lender and state to state.

The amount of savings accomplished in Car Refinancing depends on factors such as the current balance amount on the already existing loan [the first loan], the difference between the old interest rate and the new interest rate, the term period of your new loan, and so forth.

Like in any other type of refinance deal, it is always advisable to shop around major banks, accredited credit unions, or online lenders to strike the best deal. This will enhance the borrower's bargaining capability.