Have you ever made a purchase of an automobile and thought the monthly premium was something that would be easy to handle. Yes, at the time, the notion of paying $300 per month did not seem like it was something out of your range of affordability. Then, 18 months went by and it seems like things have changed quite a bit. You cash flow is not what it used to be and that means making a $300 a month payment will be a lot harder than expected. What is the viable way out of such a scenario? The answer can be found in a single word: refinancing.
What is refinancing? It is the process of procuring a loan with the intention of paying off another loan. Often, this is done to lower monthly premiums or to acquire a lower interest rate or a combination of both. This does sound like a nice idea on the surface but is it as easy as some say it is. Honestly, under certain circumstances, there really should be no impediments to refinancing used auto loans with ease.
The way the process works is not complicated. If you have a source of income or assets and are reasonably able to pay the new loan amount then you should be approved with ease. If you made all payments on your previous auto loan and are in good standing, you should not have a problem. Those with a good credit score should also have no problems being approved for refinancing. No, the process is not as tough as some assume because if you are a good borrower odds are that you will remain one. As such, there is no reason to turn down such a borrower for an auto loan refinancing request.
By: Hector Milla
Posts Tagged ‘Premiums’
Refinancing Used Auto Loans With Ease
April 11th, 2010Indiana Refinance Loans – Zero Equity Home Equity Loans
February 20th, 2010
During the last year, property values have declined in some areas of Indiana. This can make it a little difficult to dip into your equity and get the cash you need to pay off debts, college tuition, and home improvement costs. However, it is possible; zero equity home equity loans are available. There are a few catches, which is why you will want to do your homework before applying. Here are a few things you can expect when it comes to zero equity home equity loans:
Private Mortgage Insurance
If you get a new mortgage and finance more than 80 percent of the value, you will be required to pay private mortgage insurance (PMI). The same rule applies with zero equity home equity loans. The premiums for your PMI will vary depending on your lender and the amount that you borrow, but you can expect to add anywhere from $20 to $150 to your payment each month. You will be required to carry this insurance until you have built up 20 percent equity in your home.
Higher Interest Rates
Indiana home equity loan rates currently average 7.64 percent. If you will be getting a zero equity home equity loan, you will be paying a rate that is at least 2 to 6 percent higher. As with any loan, your rate will depend on your credit history, the amount you borrow, the lender you choose, and other various circumstances.
More Risk
Zero equity home equity loans aren’t right for everyone. Before applying, you will want to assess the risk factor, as well as the amount of time you plan to keep the home. If you find yourself in financial trouble, you will be hard pressed to get any more money out of your property. You may also find it difficult to recoup the money on your loans if you decide to sell.
By: Jane A. Hale
Refinance Auto Loans – How to Benefit From a Car Loan Refinancing
December 4th, 2009
As much as you may truly enjoy your car, there are things associated with it that are not always that pleasant to deal with. There are bills related to insurance, wear and tear, and, of course, fuel. Most of these things are unavoidable. However, there is one expense related component that may be effectively dealt with: the monthly car premiums.
Now, most will shake their head at such an assessment. How can you get out of paying your monthly car premium? Well, you would not seek to get out of paying the premiums. Rather, you would refinance the loan to make it more affordable. This can then have a significantly positive impact on the purchase of the car. There are two ways this is achieved. The first method is the effect on the monthly premiums and the interest rates.
When you are paying a $400 a month premium, you will be required to pay more than a $300 monthly premium would deliver. This may seem like simple math to most but it is often overlooked. That additionally $1200 per year on the car payments can drain a household budget a great deal. When the household budget is already stressed, the $1200 in payments can be even worse.
Interest rates can also be a huge drain on a budget. Why pay more interest than what is necessary? Those that may have acquired a loan when a credit score was bad will end up with high interest rates. When the credit score improves, the ability to gain a better interest rate is possible. Refinancing can eliminate the need to pay a higher interest rate which is another reason it is so helpful.
By: Hector Milla