Used Car Loan and Auto Refinancing Guide

The following guide aims to make the task of obtaining a used car loan or auto refinancing a straightforward process. If you have any questions on anything in this guide, please email us on info@lofnz.com.

For further details an a used car loan and auto refinancing calculators, we recommend Capital One Auto Finance.

Used Car Loans
The first step to securing a used car loan is to first determine what you wish to spend on a car. You should also go out to car yards or scan newspapers to determine the approximate price of what you will be paying. Once you have these details you will be able to then calculate approximate interest rates and also how large the loan you will need to secure.

The way car loans work is you pay a small amount of the value of the vehicle (say perhaps 15%). Your used car loan will then cover the rest of this. There are however specific requirements that it is necessary to meet before you can secure a loan, these will include credit checks.

One of the principal advantages of getting a loan over purchasing a car outright is that if the car is used for business purposes, the interest payments and depreciation costs can often be tax deductable. Once you have a loan, you are the owner of the car.

Vehicle loans are so popular because they allow people who usually couldn't afford to purchase a used car outright to obtain such a vehicle.

The standard period for the length of a used car loan ranges from 12-36 months right through to 61-72 months. The sooner you pay your loan off, the less total interest you will have paid. Some finanace companies offer such arrangements as no down payments, no application fees and no prepayment penalties. These additional features make used car loans a very attractive proposition.

For further information on used car loans, visit Capital One.

Auto Refinancing
There are several instances when you may consider refinancing an existing loan. One reason may be you are paying too much in interest payments for your existing loan, and a new loan would be a better option. This usually occurs when interest rates drop significantly from the level they were when you originally obtained the loan.

If you have good credit refinancing can help you obtain lower interest rates, or to convert a variable fate loan to a fixed rate. In the majority of cases, financial companies will only refinance a loan from another lending institution - not itself.

You should be careful however when considering refinancing a loan - your principal concern should be to either lower your monthly payments, or pay the loan off sooner. Many debt collectors press for refinancing, however if your financial position is very poor it is usually best not to borrow against your home.

When refinancing occurs the lender may suggest the original loan be paid off entirely at that point. This should be resisted - there are often significant prepayment penalities and fees which may effectively make the new loan no cheaper.

However as discussed earlier, auto refinancing can often be a very good way to pay off the loan earlier, or reduce the amount of interest paid.

For further information on auto refinancing, we recommend Capital One Auto Finance.

If you have any questions on used car loans or refinancing auto loans, please do not hesitate to contact us at info@lofnz.com.

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