When Does Refinancing a Used Car Loan Make Sense?
Owning a car has never been this easy, all thanks to car loans. However, in the past few years, more and more people are opting for car loan agent in Kanpur as well as refinancing car loans. Now, the question arises how should you go about it? Bhumi Finance is here with a handful of suggestions that can tell you when and how you can refinance a user car loan in Kanpur. So, without any further ado, let’s get started.
Be ready to pay the penalty.
Does your current lender subject you to a prepayment penalty for paying off your loan early? At Bhumi Finance, car loans don’t have such penalties, but if you're subject to one, do the math: If the amount you save by refinancing is significantly greater than the penalty, refinancing may still be a good idea.
Significantly low-interest rate.
If the interest rate you qualify for today is significantly lower than your current loan rate, it may be a good time to refinance a car. If it’s the same or higher, it’s probably not the right time to refinance. Remember, though: If you’re associated with Bhumi Finance for a long, you may qualify for an interest rate discount of up to 0.50%. If you come across a new/refinancing loan option at a lower interest rate during the course of your existing car loan, you can choose this new option and lower the overall interest that you pay on your loan. All you have to do is pay off your current loan and approach the new lender. However, you should make sure that the prepayment penalty charged for your old auto loan is lower than the benefits offered by refinancing. You can also consider old car finance in Kanpur if your credit score has improved over your loan tenure. When this happens, you may be eligible for a finer loan deal at a lower interest rate with better terms.
An improved credit score.
Has your credit score changed since your original car finance in Kanpur? If it’s improved, your better score may help you qualify for a lower interest rate. Learn how to improve your credit score
Low monthly income.
Refinancing your auto loan so you have a lower monthly payment can make sense if your income has dipped. The lower payment can help ease the strain on your monthly budget — and if you don’t have one, think about creating a budget so you can better control all your finances.
Time remaining on your loan.
Refinancing and extending your loan term can lower your payments and keep more money in your pocket each month — but you may pay more in interest in the long run. On the other hand, refinancing to a lower interest rate at the same or shorter term as you have now will help you pay less overall. For modifying your loan tenure: With auto loan refinancing, you can increase/decrease your loan tenure. This will ideally help you reduce your monthly payments. If you extend your tenure through refinancing, you can repay your loan over a longer period of time. This will help you decrease your EMIs. However, you need to remember that you may have to pay a higher amount in total (including your interest) at the end of your tenure. On the other hand, if you refinance your loan to reduce the loan term, you will be able to clear off your loan quickly and decrease the interest amount that you pay for your loan. In this case, your EMIs may increase.
For making modifications to a co-signer agreement.
When you refinance your loan, you can add a co-signer or eliminate your existing co-signer. In case your present co-signer no longer wants to provide a guarantee for your repayment, then you can remove their responsibility by getting a new loan from a different lender.
For changing the terms of your commercial vehicle loan in Kanpur.
At the time of applying for your current loan, you may have not been too happy with your loan offer. However, you may have settled for this loan as it might have been slightly better than the other options. If you stumble upon a more desirable auto loan with better terms related to late fees, hypothecation, insurance, application charges, etc., you may choose to refinance to enjoy these better features.
Wish to refinance your used car loan bank in Kanpur? Reach out to Bhumi Finance now at https://bhumifinance.com/.