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Can you refinance a car loan for more money?
My roommate just moved out, so I now have to pay rent for two people until I find a new roommate. It’s manageable but certainly not easy, and I’m looking for ways to save money each month. I’ve been thinking about refinancing my car loan, but can you refinance a car loan and also get money back?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
I’m sorry to hear that your roommate moved out, but paying the full rent unexpectedly is certainly an accomplishment. When you
refinance your car loan
, you can get money back in what’s known as a cash-out refinance. However, you need to have positive equity in the vehicle to get a cash-out refinance.If your car is worth more than you owe, you have positive equity in your vehicle The lender then bases the amount they’re willing to loan you based on this equity. For example, if your car is worth $16,000 and you owe $10,000, you have $6,000 of equity. Rather than refinance for $10,000, you could refinance for $13,000 and use the surplus to help make ends meet.
Keep in mind that lenders vary, and some may not offer a cash-out option. Others simply limit the approval amount. To find a willing lender and the best agreement, shop around and compare offers from multiple lenders.
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