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How do I do a cash-out refinance on my car?
I want to get a cash-out refinance on my car to pay off some credit card debt. What should I do to get the loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Paying off credit card debt with a cash-out refinance
car loan
can end up saving you hundreds or even thousands of dollars in interest, so it’s a smart move on your part.A cash-out
refinance
is the same process as getting a car loan itself. However, a cash-out refinance is highly dependent on your credit score, ability to pay back the loan, and your equity in the vehicle.If you have stellar credit, a steady income, and positive equity in your vehicle, you are a great candidate for cash-out refinancing. Most lenders will provide up to 120% of your loan balance, so you can take that cash to pay off your credit cards.
However, you need to make sure it makes sense. If your refinancing rate is higher than your current interest rate, this isn’t always a great idea. You also run the risk of higher monthly payments, as well as going
upside down
on your car loan. Take careful consideration to make sure this is the right move for you.If you want to save more money to pay down your credit cards, take a gander at that car insurance policy and see what you’re paying. Then, hop on the
Jerry
app to compare rates from 50+ top insurers to make sure you’re paying the lowest amount possible for the coverage you need. The average Jerry user saves $879 a year!View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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