2007-08-29 19:49:06 · 7 answers · asked by Anonymous in Business & Finance ➔ Credit
shiprepairwoman: I'm sorry. I don't understand. Why would your boyfriend get a new loan for his truck if it were already paid off?
2007-08-29 20:04:30 · update #1
Basically, It means you get a new loan, and pay the old loan with the money. Hence, you are financing (borrowing) for the item again (re-finance).
This may be done for very good reasons:
1) If interest rates have gone down, and you can save on interest by refinancing. This is just like finding a better deal on the loan.
2) You want lower payments, so you take out a loan that has a longer term. For exmaple, replacing your 3-year loan with a 5-year loan to lower your payment.
3) You may want to remove collateral. For example, you may want to refinance your car loan with a credit card because the credit card can't repo your car easily if something goes wrong.
4) You may want to remove regular fees from your loan, for example refinancing a mortgage that has FHA mortgage insurance that can't be removed without a refi.
-->Adam
2007-08-29 22:39:06 · answer #1 · answered by great_and_mighty_adam_levine 4 · 0⤊ 0⤋
You get a new loan to replace the old usually to save some interest but some like to use the first financed item as collateral for future purchases.
My boyfriend paid off his truck then wanted a Harley so rather that get a motorcycle loan he got another loan on the truck from his credit union.
2007-08-29 19:53:19 · answer #2 · answered by shipwreck 7 · 0⤊ 0⤋
Nice and simple one loan pays out another, usually with the benefits of lower interest rates or better offers.
For example if I have a home loan with Bank 'A' and Bank 'B' came along and offers me a better interest rate, I would refinance.
2007-08-29 21:32:41 · answer #3 · answered by Anonymous · 0⤊ 0⤋
get another loan to replace the loan you have. usually when you find another loan that has a smaller interest rate, but don't change too much coz it looks bad on your credit rating. some people refinance if they want to get a loan to pay out other loans and credit cards to make just one loan (called consolidation) which means lower repayments
2007-08-29 19:58:46 · answer #4 · answered by TP 2 · 0⤊ 0⤋
That's an interesting question!
2016-08-24 14:00:29 · answer #5 · answered by Anonymous · 0⤊ 0⤋
get another loan to replace the loan you have. I found interesting information about your answer here. http://all-debt-consolidation-loan.blogspot.com/2007/07/loan-consolidation.htmlGood luck!
2007-08-30 04:41:34 · answer #6 · answered by Anonymous · 0⤊ 0⤋
I would like to know this too
2016-09-19 05:22:57 · answer #7 · answered by Anonymous · 0⤊ 0⤋