Thinking of Refinancing? Rare but Remarkable!

Aug 09

These days, it is very common for many people to have mortgages on housing and car loans. Sometimes, even those who are already quite well-off still choose to go for such loans with installment arrangements. Hence, this is one facet of your financial life that can help bring about large amounts of savings in the long run.

At present, there are already millions of individuals and families who have saved bigger bucks because of a simple refinancing move on their house mortgages. Now, to the surprise of many, this strategy has extended to car loans too!

For savers, the interest rates that have been going downhill are a source of misery and frustration. On the other hand, the borrowers are rejoicing because of this. Around four years ago, these rates were at least three percent higher. Thus, those paying mortgages are fortunate to have saved hundreds and even thousands of dollars due to such rate plunges.

Refinancing Consideration on Car Loans

However, despite the popularity of this refinancing move before, plenty of borrowers are still not aware that the same principle can work on car loans. It seems simpler and easier to just take advantage of amazing financing deals from dealers of new vehicles. Besides, a lot of car owners today purchase new cars even before they have completely paid off a prior car loan. What’s more, due to the quick loss of value when it comes to cars, many end up with greater outstanding balances as compared to the actual present value of the car. Indeed in this regard, refinancing may be out of the question. It seems quite difficult to even consider.

Surprisingly, the refinancing move is being practiced widely now. In a SmartMoney article that was released recently, studies show that auto refinancing applications have actually increased by approximately 30% from the level one year ago. Most probably, those who avail these refinancing options have seen that they can still save a bit through this action plan. After all, even a small drop in interest rates can lead to a good amount of savings. Also, car loan refinancing is much cheaper than house mortgage refinancing. Hence, people opt to go for “break even” through refinancing when car values depreciate.

Taking the Leap on Refinancing

Given the information above, do you think you are ready to get involved in a refinancing scheme for your own car loan? If you presently pay for a car loan with a considerably high interest rate, then you should definitely opt for a lower rate that comes with refinancing. There can be a significant decrease in your monthly amortization.

Nevertheless, be on the lookout for scammers. There are plenty of people who may take advantage of this refinancing craze with the use of gimmicks that can fool you. Even actual dealers can convince you to buy products which are not related to your main purpose, such as a warranty protection. In such a situation, it would be best for you to assure your dealer with a referral or a future purchase – remember we know money for savings account. This can increase the likelihood that he will just provide you excellent services and a winning deal on your refinancing move instead of trying to get another sale out of you.