Lower Interest Rates – This is the most common reason people choose to refinance their car loans.Let's take a closer look at some of the benefits of refinancing your existing auto loan. In some cases, when there is sufficient equity in the vehicle itself, people choose to refinance in order to free up some ready cash. Some people refinance their auto loans to save on the total cost of their purchase, while others choose to refinance as a way of lessening their monthly financial burdens. There are some definite advantages to refinancing your current car loan, and they all have to do with managing your money more effectively. The Pros and Cons of Refinancing Your Auto Loan Still, if you can secure a new loan that is even a single percentage point cheaper than your current loan you can save a significant amount of money, especially if the remaining balance on your existing loan is fairly substantial. You first have to find a lender who is willing to underwrite a new car loan that gives you a lower interest rate, as well as offering more manageable repayment terms. Essentially, you are using a new, and more favorable, loan to pay off the loan you have now. Refinancing an existing car loan is a relatively simple process. However, refinancing a car loan does have a downside, and it is important to understand both the advantages and disadvantages before you put pen to paper. Refinancing allows you to secure a lower interest rate on your loan, reduce your monthly payments, and even free up some much needed ready cash. But did you know that you can also refinance an existing auto loan?Īuto loan refinancing offers many of the same benefits as home loan refinancing (albeit on a somewhat smaller scale), and under the right circumstances can be a real boon to anyone diligently working away at a high interest car loan. Frankly, it's pretty hard to avoid those mid-afternoon and late night television ads championing the benefits of home equity loans, and promoting the financial advantages of refinancing an existing mortgage. Cash Back Calculator at doubt you've heard about the benefits of refinancing a home loan. You can save (or print out) two different versions of the spreadsheet in order to make comparisons.Ĭheck out the Low APR vs. The auto loan calculators in our spreadsheet let you specify a cash rebate and the annual interest rate. Sometimes, the auto manufacturer offers incentives in the form of a cash rebate or lower interest rate, but usually not both at the same time. However, there are a few online calculators that you could use: Our auto loan calculator spreadsheet does not contain a calculator for comparing leasing vs. We don't provide technical support for creating custom spreadsheets, but if you have some suggestions or comments, please let us know. However, make sure you know how the equations and formulas work before you try to branch out on your own. The spreadsheet has been left unlocked, to give you complete freedom to modify it as needed for your personal use. In the Payment Calculator, you can also enter values in the yellow cells (the Extra Payments column). Basically, you just enter values in the white-background cells, and see what happens to the other numbers. Information about how to use the loan calculators are contained within the spreadsheet itself, mostly as cell comments.
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