What is a refinance auto loan?
Refinancing a loan is basically exchanging one loan for another by replacing an existing loan with an alternative loan using the same assets. Most people choose to refinance their vehicle loan to reduce the amount of interest they are paying or to reduce their monthly repayments by getting an increased car loan amortization period. Are refinance auto loans right for you? As mentioned above, a refinance auto loan is not for everyone and deciding whether it is a good move for you or not comes down to your individual situation. The following are examples of situations where a refinance auto loan would be the right way to go: Payment reduction If your current loan has an interest rate from 0 to 2.9 percent obviously you won’t need to refinance for lower interest rates. However, many loans with such low interest rates come with a short amortization period of two or three years which means the monthly repayments could be quite high. Many people feel that after a while these monthly payments
