Saturday, October 15, 2011

Have You Ever Considered a Refinanced Auto Loan?

By Jackson Wellington


If you live in Custer SD and you're looking for a way to free up more cash in your budget, refinance auto loans may actually do the trick for you. If you have at one point in your life purchased a home on a mortgage or a loan, then you almost certainly have stumbled upon the term refinancing. In home buying, refinance home loans are the process of finding the financing for a current loan by applying for another loan which has a reduced interest rate. Thus based on the above outline, we can thus decide that refinancing is simply a way for us to pay off one loan using money taken from another loan.

Sounds simple does it not? Naturally, refinance is a lot more complex than that. In refinance automobile loans particularly, one must remember that refinancing only works if the rates are lower. This much is a certainty. If the rate of the new loan is higher than the current loan, then you'd be much better off paying for that loan instead of spending your hard-earned money on your bloated new loan payments.

Refinance Automobile Loans: Its Purpose

The point of refinance car loans is to allow the borrower to save the money which would be spent on loans with high interest rates. Refinance auto loans are one of the best kept secrets in the vehicle financing industry. Although home loan refinancing has become a common practice among many owners few vehicle owners venture into the sector of refinance car loans. You might imagine that perhaps one of the reasons is that many of those auto owners have subprime credit to their names. Yet, bad credit is more reason for you to get refinance auto loans.

Refinance Automobile Loans: Auto Industry's Best-kept Secret

Refinance vehicle loans follows the same pattern as refinancing your home. Through refinance car loans, you can pay off your current loan and save thousands of dollars on monthly payments. It's a good way to economize on your vehicle. With lower interest rates on refinance car loans, your monthly payments decrease and at the same time your monthly savings increase. Refinance car loans could also mean that you'll be able to pay off your loan principal earlier, so letting you save some more on accumulated interest fees.

Refinance Vehicle Loans: Poor Credit Borrowers

Auto customers with poor credit can get refinance auto loans as way for them to lower down their APRs. Do not let dealers con you into assuming otherwise. Even with bad credit, you still have an opportunity of getting a loan with rates that are lower than 21 % to 25 percent APR.

Take as an example a refinance automobile loan for $16,500 on a new Honda Accord. You agree to pay off the amount at the end of 60 months at 21 percent APR. So you start paying down your car loan for 1 or 2 months then you choose to get a refinance car loan with another bank, this time at 6 percent APR.

The regular payment you are making on your current loan is $446 while your payment for the new loan is only about $319. The total interest costs on your current car loan at the end of the loan period would be around $10,283. You can save up to $7,600 of that if you get a refinance automobile loan with a total interest charge of only $2,639. Now, do you not think refinancing is a good option?




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