How is refinancing a car loan helpful?

Answer 1

Refiancing can help in a few ways:

1. If you are paying a high interest rate, just ask for a term that matches your existing time to pay, and you'll have a lower payment without adding time on to the loan.

2. If you are having trouble making the high payments, you can refinance and add a year or so on to the loan to make the payments more affordable to you.

3. You can shorten your term by refinancing, usually at a lower rate.

Answer 2

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Answer 3

As other people have stated, the most common benefit is the potential to refinance to a lower interest rate. You can also refinance in order to have a lower payment. I refinanced my car a few years ago when I was still in med school-- even though it was a higher rate, it was still a better deal for me because I didn't have a lot of money. The neat thing about refinancing for a lower payment is that it lowers your monthly obligatory amount (which is great for those months when money is tight, when you have extra unforseen expenses) but nothing stops you from paying more than the scheduled payment.

Answer 4

It is only really helpful if you have a ridiculously high interest rate, and have at least three years left to pay. While it does lower your monthly payments it extends your length of payments. So instead of paying off in three years it could go up to five. If you interest rate is 10% or above you might want to consider refinancing through your bank.

Answer 5

You may be able to get a lower interest rate on the loan. Also, you may need the lower payments, which you will get by financing for a longer time period.

If your situation will allow it, you can get a home loan and pay off the car loan. The interest paid will then be tax deductible, normally. Do check with your accountant to be sure of this first. good luck.

Answer 6

You can lower your payments, but it will usually extend the length of your loan.

Answer 7

reducing the intrest rate and also lowering the payment.........