The easiest way to start is by figuring out which it would be more beneficial for to finance a new or an older car.
for example, the current interest rate on a 3 year old used car can be around 13%. this opens up an opportunity for you to take out a loan and replace your current vehicle with one that's cheaper. in light of this, looking into refinancing might not be 100% necessary. on the other hand, if your credit score is good enough and you have been driving the same car for 5 years without any major accidents to speak of, then refinancing might just make sense financially.
it's also worth considering how long you anticipate owning your current vehicle before moving on down the line; traditional
does refinancing a car hurt you?
refinancing a car can make you look like an irresponsible driver, but also has its benefits.
of course, there are some disadvantages to taking out the loan in the first place. first, it means making payments on two car loans. second, if you're driving aimlessly in traffic because you're broke and without a plan to get back on track financially, every stop light is just another red stop light that must be endured before being able to be right in front of your favorite retail store again-which only exacerbates the deleterious cycle into which you have foolishly put yourself with this decision. on top of these drawbacks is refinancing's one major downfall-that thoughtless little thing called interest rates. once again
how soon can i refinance my car?
generally speaking, you can refinance your car loan anytime.
refinancing will typically reset the terms on the maturity of the loan and potentially lower your interest rate while giving you more payoff time if that is important to you. if up until now, you've been planning on paying off your car early and putting it behind you, then refinancing may present some flexibility for an earlier payoff date with a shorter period of time on the open-ended loan balance. speak with your lender about changing your terms – they may have options available to give up additional periods of low apr in return for lower rates upfront or different cashflow conditions such as installment payments which could help if income levels fluctuate from month-to-month or year-to
how does refinancing work on a car?
generally, refinancing your car loan will lower the interest rate you are being charged. however, it is important to show an ability to make monthly payments even after factoring in the new reduced rate.
this can be done by having a high-credit score or another type of collateral, such as real estate property. upfront fees are generally negotiable with lenders and might not be necessary if something is offered in return for an agreed upon exchange value less than the original loan amount. be careful that this does not create a situation whereby what looks like reduced monthly payments turns into more over time because of interest built up over the duration of the loan agreement itself. it's always best to get everything put down on paper before agreeing
