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What is the meaning of refinancing a car loan?
With COVID lockdowns going on throughout the country, I’ve heard about many people saving money by refinancing their car loans. What’s the definition of refinancing a car loan?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
That’s a great question! With many people out of work during a lockdown, saving money in any way possible could be helpful!
Refinancing
a car loan simply means you are applying for a new auto loan with updated terms that pays off your current loan.Once you sign a car loan agreement, the terms are usually non-negotiable. If you are struggling to repay the loan or want to pay it off faster, refinancing is the way to go. Refinancing can result in a new interest rate, agreement, and term length that are more favorable than your current loan.
If you are interested in refinancing, you may be able to through your current lender. But to find the best agreement and rate, shop around and compare offers from a few lenders. To apply, you need the same documents used to secure the initial loan, but also:
- Your current monthly payment
- The remaining balance
- The remaining loan term in months
- Your interest rate
Alternatively, if you don’t want to refinance but would like to save some money, you can use
Jerry
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