Posted on December 11, 2019 by NALN
An auto loan is one of the most common debts people are seen struggling with. However, auto loan refinance is an easy way to reduce the monthly payments, as well as interest. Unfortunately, it is not as easy as it sounds. In this article, we shall discuss the major roadblocks that keep car owners from having their auto loan refinanced.
Let’s break it down.
If you bought a vehicle around three years back, there is a perfect chance that the amount you owe is more than the worth of your car. In such cases of car loan refinancing, the credit unions and banks won’t loan you the full current worth of your vehicle.
Do you know what it means? It means that you will have to put in thousands of dollars from your pocket to fill up the gaps between the owed amount and the refinancing.
For example, the balance on your loan is 20,000, but the current value of your car is 15000, and the bank is only giving you 60% of the current car value. This means that the new loan will be not more than $9000, and you’ll have to pay $11000 from your pocket.
Every day in the newspapers and on the internet, we come across catchy auto loan refinance ads posted by banks. The promised rates are too good to be true but are captivating for the loan-stricken public to have a go. Unfortunately, those rates are only applicable to vehicles that are not more than a couple of yours old.
If your vehicle has been on the road for a more extended period, the new loan will present you with higher rates. These rates are similar to what most banks and credit unions charged used cars.
Most regrettably, the credit score is the first thing credit unions, and banks look for when you apply for an auto loan refinance. If your credit score is not up to par, you are most likely to have your refinance application declined. Even if it gets approved, you’ll be paying higher interest rates.
If you find a deal where refinancing appears to be a useful option, make sure to take care of the following.
Before you refinance your car loan, make sure not to skimp on any of the points mentioned above. Lastly, if you find it hard to pay off your car debt, might as well consider trading your current vehicle for a new one. Doing so, not only will you be paying a low-interest rate, but it will enable you to purchase a cheaper car. And there is the answer to your problem. A lower monthly payment combined with a reduced interest rate is what you were refinancing for.
National Auto Loan Network is headquartered in Newport Beach, California. The company was founded in 2010, by a group of finance professionals with over 40 years of combined industry experience. Under the direction of president and CEO, Marco J. Rasic, NALN specializes solely on the refinancing of motor vehicle loans. National Auto Loan Network''s skilled team of loan officers help hundreds of consumers replace their high-interest auto loans more favorable ones. For more information about National Auto Loan Network please visit naln.com
