880 Walkers Line, Burlington, ON, L7N 2G2, Canada

How Car Loan Refinancing Works In Dundas

How Car Loan Refinancing Works In Dundas

Auto loan refinancing is an excellent way to raise money, consolidate debt, lower your monthly payments or adjust the term of your loan. We talk about it a lot on our blog so we thought it would make a great subject for a post. Our Dundas auto loan team shares what you need to know about how car loan refinancing works


What is Dundas auto loan refinancing?


Auto loan refinancing is where you change your current loan for a new one with different terms. That could be borrowing less, borrowing more, extending or decreasing the term of the loan or to get a lower interest rate.


There are lots of different reasons why you might want to refinance.


Lower monthly payments – Borrow less, pay less. If you have already paid off some of your car, you could lower the loan amount for a lower monthly payment.


Higher monthly payments – If you have spare cash left over each month, you could pay off your loan faster by having higher monthly payments over a shorter term.


Longer term – If you need to free up some cash each month, extending the term of the loan will mean lower monthly payments.


Lower interest rates – If you have improved your credit score or rates have lowered, a small saving in the interest rate could make a real difference to the cost of the loan.


You can also refinance to remove a cosigner and a few other reasons but those above make up the majority of refinancing motives we see.


How Car Loan Refinancing Works


Auto loan refinancing basically replaces your existing loan with a new one with different terms.


When you apply for the new auto loan in Dundas, you pay off the old one in full and continue paying the new loan with the new terms. It’s a very simple process.


For example, you have a car loan originally at $45,000 and you have paid off $15,000. Your car is now worth around $32,000, you have 4 years left to pay and you’re paying around $700 per month.


You could refinance that loan down to $30,000 to lower your monthly payments. You could extend the term up to 5 years to lower your payments down to $613 per month or you could shorten the loan term so you pay more per month for a shorter time.


If you had more equity in the car, you could get a loan for the car’s value to pay off other debts or free up cash.


You can use an auto loan calculator to work out the effects of your options.


Auto loan refinancing in Dundas isn’t for everyone. It’s only worth doing if you really need to change the terms, lower the payments or you would get a significantly lower interest rate. Otherwise, the savings might be minimal and just not worth the trouble.


If you want to discuss your options, our Dundas auto loan team will help.


We will use all our skill and experience to deliver the lowest possible Dundas auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.


Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!



Categories: Auto Loan

Tags: ,