Want to change your car but you have a car loan?

Assume a situation in which we find in a car dealership the car that we always liked but never had the opportunity to buy and this time may be within reach for less money than we thought. But hey, we already have a car loan that we are amortized monthly to buy the vehicle that we have now and raises the following question: I can get a new car loan to buy the one I like? The simple answer is, depends on a few factors such as their ability to pay or have already written off at least half of car loan that remains in force. Where these situations are favorable, you can probably get a new bank loan or renew your existing one.

What is the renewal of a car loan?

For in many cases we tend to think that the word renewal lend money is only the financial transaction we do with our bank or financial institution through which we refinanced our debt when we have no chance to continue to pay the amortization for the same has been done difficult to face and we delayed. But it is the correct definition when we talk about renewing a car loan are saying that the financial institution or bank with which we work we will grant new loans and credit canceling the same part of the force we have and paying the difference in effective.

To be clear, if now we have a certain amount of money for the car loan you request to purchase the car you have, the bank will lend such an amount of money that exceeds this amount you owe and the difference will be that pay us to buy the new car. Among the characteristics of this new car loan that will most likely find the same interest rate if they have not changed substantially and is likely to charge us the same charges as the first car loan. Recall for example that within these expenses are included that deal with the new pledge of new car insurance costs and the notary and others in addition to management fees that banks always charge.

When can I apply for a new car loan?

Most financial institutions, request that the client has paid at least 50 percent of car loan that has the same effect because it is the way the bank has to ensure that will not increase credit risk and therefore not will interest rates climb. The bank also makes sure to give us a new car loan will thus be able to offer a little more money so we can then get to buy that car you were looking for. If we have met at least half the payment of this loan car we have now in force, the amount the financial institution may grant we may not be the need.

Anyway, if our ability to pay has increased over time because we have better income and adding a better job we've always been good payers when repay our loans staff , it is possible that the bank already knows our history credit, we can give a car loan for a longer amount of money but that should be seen case by case because each particular bank is studying applications individually.

Achieve better terms and rates on new car loan

Insofar as the premises mentioned in the preceding paragraph on good compliance in payments and if we have more income for our work, we get the new car loan is more flexible in terms of two fundamental points: the interest rate and term funding. We will surely put the new car as collateral of the credit requested and this is very important to ensure that rates are improved since the bank to have this kind of guarantee will reduce your risks and likewise the interest received on the new loan car . As to timing, we must not forget that the greater the longer term may be the interest rate so it is advisable to ensure optimum between these two variables in order to meet the payment of car loan in the most simple and with the confidence that we will do so.


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