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Why Obtain an Auto Refinance Loan?

If payoff your existing auto loan monthly payments are taking a toll on your finances then you must apply for an auto refinance loan. As the term ‘refinance’ suggests you obtain a loan to payoff your prior existing loan, which can be obtained with better or less burdensome interest rates.

If your annual percentage rate on the car has crossed 5% then refinancing you loan becomes almost necessary. Even in a bad credit situation re-financing an existing loan would bring about a great relief to your credit situation and will only benefit you.

With the help of auto refinance you can reduce the interest rates by choosing the loans which offer lower interest rate as compared to your existing auto loan. But if you wish to reduce the amount of monthly payments then an extension of term may be requested for in your existing auto loan.

Certain things to keep in mind before applying for an auto refinance loan:

Read the terms of the auto refinance loan carefully. If you default in repaying your refinance auto loan it will be an additional personal debt, hence manage your finances accordingly.

If the value of the car is less than $7500 and is very old, it is not suggested to get it refinanced by another loan and moreover finding a lender for it would be difficult.
Get your credit position checked; find out what is your FICO score. You may apply for auto refinance loan if the FICO score of yours is at least between 600 – 650 and your minimum income per month is around $2000.

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