Why do I need to refinance a car loan?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Often, people take money to buy cars from financial institutions. In recent years, the popularity of a banking service known as "car loan refinancing" has been growing. This procedure is beneficial in the following cases:

- when a customer wants to exchange an old car for a new one;

- if the borrower is not satisfied with the current car loan.

Motives

Constantly something happens: interest rates change, new credit programs appear, government subsidies, new vehicles. Refinancing your car loan helps you keep up with the changes. The desire to change the car appears in many people before they fully pay off their debt. According to statistics, mostly drivers change their car every few years, and a car loan is usually given for a period of up to 5 years. Another reason for refinancing is the change in interest. There are many similar programs, banks compete and try to improve conditions in order to attract customers. Sometimes there are changes in the life of the borrower himself, for example, his income changes, a reliable person appears who can become a guarantor, or other circumstances that make the loan morebeneficial. If someone has issued a loan in dollars, a change in the exchange rate is also a reason to refinance. Getting a car loan without CASCO is also an option to save money.

What car dealerships offer

Salons selling used cars sell foreign cars on credit, purchased several years ago. To reduce the time required for the sale of a vehicle, salons enter into an agreement with the bank, the client signs the necessary documents. The "old" car will be in the showroom, and the "new" car will be given to the buyer. The cost of the abandoned vehicle will cover part of the price of the one taken away, the loan will be issued for the difference in price. Customers choose an old or used car at will. It should be noted that refinancing a car loan allows you to buy foreign cars no older than 10 years, VAZ cars that are no more than 5 years old. Older banks do not accept cars as collateral. Cars with high liquidity are popular, their age, mileage are assessed, and technical inspection is carried out. Typically, the conditions offered by car dealerships correspond to the current market situation.

Banking programs

You can refinance in the same bank in which the auto loan was issued, or in another. One of the first to offer this service were such banks as Absolut, Raiffeisen, Unicredit. If we consider the refinancing of a car loan that they offer, then the conditions are determined by the period for which the funds are issued, the size of the down payment (as a rule, it is equal to the price of the old car), and the loan currency.

Preferential on-lending

When there is a desire to purchase a new car included in the state subsidy program, you can give the old car as a down payment. It is only necessary to clarify with the financial institution information on the provision of preferential loans. Be sure to ask about everything in order to make a profitable refinancing of a car loan. Banks may impose different conditions.

Required documents:

- income statement (2NDFL);

- a copy of the labor (the contract stating that you are hired);

- passport;

- driving license.

What does Sberbank offer?

2 programs are popular in this bank:

- exchange of a loan car for a new one;

- changing the terms of the loan.

Refinancing a car loan at Sberbank is a serious procedure that includes:

- submission and consideration of an application to the bank;

- registration of a guarantee (additional);

- vehicle insurance that is purchased.

Refinancing car loans is an interesting financial tool in the hands of many people who know how to carefully understand all the conditions of the programs offered.