A loan is usually made when a financial need needs to be remedied quickly. Thus, having the means to have a larger loan with less interest can be of great help. And you who are thinking of getting a loan, do you know how car refinancing works?
Refinancing your car may be the best alternative to get that much-desired loan.
If you own a vehicle, know that you can use it to apply for a loan to a bank or company. In this way, the same will be the guarantee of payment of the installments of the requested amount.
What is Refinance Car?
Refinance the car meaning use it as collateral to repay the loan requested. When this procedure is performed, your vehicle can be auctioned, and the amount will be used to pay off your debt if you do not remove it.
Therefore, having a good financial planning is of utmost importance before you apply for this type of loan. Also, it is worth knowing that the amount delivered by the bank or company will be according to the value of your vehicle and the analysis of income realized before your credit is released.
What are the conditions to refinance my car?
First, the car has to be in your name. That’s the main point for getting the money. Secondly, some places allow the car to be financed without the parcels being taken out. But in that case part of the amount will be used to repay the vehicle, and the remainder will be borrowed.
In that case, planning is even more important. Depending on the situation, you will only be exchanging a smaller debt for a larger debt and, besides having no advantage, you will be losing money.
Know that taking out your car with the loan amount does not guarantee that it can not be taken by the bank. In that case, the possibility will only be transferred from the bank in which you parceled the car to the financial one in which you applied for the loan.
Some places also check the status of your Individual Taxpayer’s ID (CPF). If your name is dirty, there will be less chance of getting the credit release.
What amount can I borrow?
The value is defined by the bank or financial. In general, the value of the vehicle and its income are used as a way of calculating how much you can borrow. In addition, if you have fixed monthly debt that exceeds 30% of your income, denial of credit can occur.
Can I Sell a Refinanced Car?
It depends on the financial with which you made the loan agreement. In most cases, it is necessary that it is completely removed to be able to carry out the transfer of the car.
But in some cases, there is the possibility of transferring the debt to the buyer. However, a buyer’s income analysis is done before, in addition to the procedure being totally dependent on the bank’s approval. And, all costs incurred for this request are charged to the seller and buyer of the vehicle.
Can you understand how vehicle refinancing works? Then get further questions and follow more stories here in the Low Interest.
Lower interest rates than personal loans
Interest is a word that every Brazilian wants to see far, but there are some small ones that can fit in your budget. This is the case of refinancing vehicles. With a rate between 1.80% and 2.30%, you can refinance your car and pay interest less than a CDC, Direct Consumer Credit. But be aware that this is only average because some institutions charge higher or lower fees, but always lower than personal loans, credit cards and overdrafts.