This is how Car Loan Refinancing Works in Delhi

This is how Car Loan Refinancing Works in Delhi

Posted on August 27, 2021

Want or need to change your car loan? Want lower monthly payments or can now qualify for a lower rate? These are all viable reasons for refinancing your auto loan. But many people are unsure exactly how car loan refinancing works.

We asked our Delhi car loans team to explain how car loan refinancing works. Turns out, it’s just as easy as getting your loan in the first place!

Refinancing a Delhi car loan

Refinancing a car loan just means getting another loan to replace your original one. It’s no more complicated than getting that first loan and involves many of the same steps.

That means:

Checking your credit score

All borrowing depends on your credit score and that’s the first place you should look.

Don’t just check your score, check your whole credit report. Make sure it’s 100% up to date and accurate and everything is as it should be. If you spot any errors, have them corrected before you refinance.

Then check your score. Does it look right? Is it lower than you expected? If it all looks good, move on. If it doesn’t, look for reasons why and follow them up.

Prepare your paperwork

Next, you need to prepare all the loan paperwork ready for the application.

That means collecting salary statements or pay stubs, bank statements and any other proof of income. Typically, you’ll need 3 months’ worth of these.

You’ll also need the usual proof of ID, of address and any supporting paperwork if you’re a contractor or self employed.

The sooner you get all the paperwork together, the better. Once you get preapproved, you can submit it all to hopefully, smooth the application process and get a faster decision.

As you’re refinancing, you don’t necessarily need a down payment or trade in. If you can put money down to reduce the loan amount, you should. If you don’t have the money, as long as you have equity in the car, you should be fine.

Contact your lender to tell them what you’re planning and to get a settlement figure. You’ll need this when you refinance.

Decide on the terms of the loan

People refinance for all kinds of reasons. Before you begin loan shopping, you need to decide what changes you’re looking to make.

If you have a bad credit car loan and can now qualify for a standard loan, that’s a no brainer.

If you need to extend the loan or borrow less for cheaper monthly payments, that’s what you should aim for.

If you wanted to change the term, lender or something else, you can factor that into your search.

Apply for enough to cover the settlement figure of your current loan and any extra you need.

Get prequalified and then apply for a new car loan

Shop around for lenders, work with one of our team and make sure you check the entire loan market for the best deal.

Once you have found a deal you like, go for prequalification to make sure you could get the loan if you wanted it. Then you can get preapproval or apply for the loan as you need.

Told you it was easy!

Contact Unique Chrysler for help, advice and competitive Delhi car finance and leasing.

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