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Car Loan Refinancing in Waterdown To Raise Money

Car Loan Refinancing in Waterdown To Raise Money

Need money in a hurry? Maxed out your credit cards and need a cash injection? car loan refinancing to free up cash a good idea? Our Waterdown auto loan team finds out!


As we have all learned over the past year, life sometimes loves to challenge us or put us in awkward situations. Financial situations can be more worrying than most and can trigger knee-jerk reactions to escape them as quickly as possible.


That isn’t always a good idea, hence this post.


Car loan refinancing in Waterdown


If you find yourself in difficulty and need a little cash, refinancing your auto loan can be a good idea. It isn’t your only option though and may work out more expensive in the long run.


Auto loan refinancing means getting a new loan to replace the old. If you have paid off a portion of the loan and it’s now less than the car is worth, you can leverage your car’s value on another loan.


For example, say your car is worth $20,000 and you have $8,000 outstanding on the loan. In theory, as long as your credit score is sufficient, you could refinance up to that $20k limit to free up $12k of cash.


Not all lenders will let you refinance the whole amount but some will. We don’t usually recommend it as you’re exposing yourself with more borrowing, but it can be a good idea in certain situations.


Extra cash comes in useful


If your home needs emergency repairs, you have medical bills to pay, you lost your job and need money to see you through, or something else, refinancing may be useful.


If you cannot raise money any other way, it may be your only option.


We sometimes recommend refinancing an auto loan to consolidate other debt. For example, if you owe on several credit cards, store cards, have a personal loan or other debt, paying everything off with a consolidation loan can make life much more manageable.


You then have a single debt and a single payment to manage.


In many cases, refinancing a London auto loan to consolidate is a good idea. Much will depend on your specific circumstances though.


How much can you get with auto loan refinancing?


You can usually borrow up to the value of your car when you refinance. Not all lenders will offer 100% of the car’s value but some will. Your credit score will have as much influence over a loan offer as the value.


If you have poor credit, the lender may offer less than the maximum value. If you have good credit, you stand a higher chance of borrowing the full amount.


Remember, the more you borrow, the higher your monthly payments or the longer the term of the loan.


Interest is charged over time, so the longer the loan, the more interest overall you’ll pay. Even if the monthly payment is lower.


Refinancing a London auto loan is a balancing act. Only you can decide whether it makes sense or not but our team can help you make sense of the numbers.


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


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