Are you looking for a loan but don’t know which option to choose? The loan with car refinancing can be a great option.
It is a very beneficial alternative for those who want to get around the financial squeeze or use the money to invest in something. The conditions, rates and terms are more attractive than traditional loans.
In this mode you borrow from a financial institution and offer your vehicle as collateral. Thus, if you do not pay, they can take your good.
For this reason the terms are shorter due to the low risk that the institution has. Let’s know a little more about this modality.
How Does Vehicle Refinancing Loan Work
In this mode you make your vehicle available to the financial institution and for the duration of the contract the vehicle will be sold to the bank, but ownership will remain yours.
You can get a vehicle refinancing loan of up to 80% (Fipe or Molicar). In this case your income will define how much you can pay monthly installment.
Being a low risk operation for the bank, it can offer very low rates and deadlines. Thus, the parcels are small and accessible to many people.
When you finish repaying all installments, the car will be yours again for good. To refinance your vehicle loan you will need to go to the bank taking your date and the automobile date.
You can also fill in your online application and submit it directly for credit analysis.
The bank will analyze your credit line and grant you the loan or not. You will only be able to refinance if the car is fully settled, except when it is sold to the same institution that approved your credit.
In this case the release happens because the balance is settled and the bank returns the difference.
Before applying for a loan it is advisable that you do several simulations at several different institutions. This will allow you to compare offers and see which one will suit you best.
They can vary greatly from bank to bank, so it is good to make a comparison. See rates, forms of payment, term, amount offered, amount of installments, etc.
You do not need to borrow only from the bank. You can also opt for financiers. The advantage of opting for them is that the bureaucracy and approval time are much shorter compared to any bank.
One of the best financiers in the country is Finance Everything. Simulate your loan and see that you will have the best rates and payment methods on the market.
After making the simulation just wait for the institution to approve the loan and you can sign the contract.
What is the best way to plan for a vehicle refinance loan?
Before making the loan you need to be programmed to pay the expenses. At this point you need to make an assessment of your budget.
The amount of the installment may not exceed 30% of your monthly income. But this value is still very high. Ideally, consider up to 15% so that you cannot generate future problems with your budget due to unforeseen events.
Make a plan to know how much you can pay per month and how much you really need to borrow. We advise never to take more money than you really need.
What are the advantages of auto refinancing loans?
This type of loan has been widely used due to the great benefits they can bring to those in need of money. See some advantages of this line of credit.
- Lower interest rate
As you are providing a collateral for your loan, the risk of the transaction decreases, allowing the financial institution to charge far lower rates than the traditional loan.
- High value loans
The same reason interest rates are lower also works for the loan amount. As the bank has a guarantee it will have less risk, so it may increase the amount of the amount.
The higher the value of the vehicle, the higher the chance that you will have a higher credit released.
- Be able to do what you want with the resources
In auto loan refinancing it is not necessary to say what the destination of the money will be, ie you can use it for whatever you want.
In other forms of credit you need to have a specific destination. Those customers who have debts in the bank and wish to repay them can use this mode.
So they pay their debts and still have the change to whatever they want. Then just go by repaying the parcels gradually.
- Longer payment terms
The payment terms can be quite long, which makes the installation have a smaller value, not weighing in the budget and being accessible to more people.
How will the vehicle be evaluated?
In Brazil, vehicles are evaluated by the Fipe table. It is based on the average value of car models according to the year of manufacture. There may be variations in price due to storage conditions.
The financial institution may make its own assessment, which will be considered at the time of the loan.
It was possible to understand a little more about vehicle refinancing loan. Share with your friends and also read about How Car Financing Works.