Reduce Your Auto Loan Repayments Instantly

by KEONI LENI

Open up any auto magazine and you will find hundreds of advertisements for auto loan refinancing. They all direct you to web sites that make refinancing seem hugely attractive

The benefits of refinancing are always set out in great detail. What of the disadvantages

Auto loan refinancing is the process of taking out a new loan to pay off your old auto loan. Under current law the new loan must be taken out with a new loan company.

There is a charge for early repayments do refinancing may not save you any money. So it is a good idea

As it happens, there are a number of circumstances in which loan refinancing makes sense Auto loans come with a fixed rate of interest. Interest rates change over the life of a loan. If interest rates drop several points, either as a result of changes in bank rates or as a result of your own improved credit rating, it can make sense to refinance your loan.

Conversely, if your circumstances have deteriorated and you are finding it difficult to keep up repayments you may be able to enter into refinance deal to extend the life of the loan and reduce your monthly payments. Remember, while your monthly payments are reduced you will inevitably end up paying more in total and the value of your car is going to be reducing all the time.

So what are the drawbacks?

First and foremost - cost. Never lose sight that the objective of all loan companies is to make money. Pay very careful attention to all the costs attached to refinancing your loan. In particular, check that all early repayment charges are factored into your decision.

There are also a number of limitations on refinancing. Your car must be worth more that the outstanding loan. The outstanding loan balance must be at least $7,500. These 2 criteria mean that relatively few people can benefit from refinancing

To come out ahead on a refinance you need to have 4 years left on the loan and you need to be offered at least a 2% improvement on your current loan

Refinancing to lower repayments by extending the loan may be a fact of life for some. Life doesn't always run to course. Just remember that those lower repayments can hide the total amount you pay back in the longer term. Of course, you may not have a choice. Getting the right auto finance can save you thousands of dollars. For help and information on obtaining the auto loan or auto lease that is right for you visit our blog at http://www.autoloan.jklblog.com