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Apr 30
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3 Top Things to Know Before Refinancing a Car

3 Top Things to Know Before Refinancing a Car

With falling interest rates, this is an excellent time to refinance your loan on car. Refinancing a car loan means switching to another lender for lower interest rates or better services. When done carefully, refinancing your car loan can save you a significant amount of money while also allowing you to repay the loan faster.

But before you refinance car loan, make sure that you keep the below-mentioned points in mind.

Your Credit Score:

Before starting the refinancing car loan process, make sure that you first check your credit score. The main goal of getting your car loan refinanced is to avail significant savings as another lender is offering the loan at a cheaper interest rate. However, this will not be possible if you have a low credit score. Lenders in India generally offer better interest rates to borrowers with good CIBIL score. So, ensure that you check the eligibility criteria of the lender before taking things further.

Search for the Lender:

Once you are sure that your credit score is good, the next important step is to search for lenders for car refinance. While there are several lenders in India to get the car loan refinanced, it is important to select the best deal. And best deal not just in terms of the interest rate but the service provided by the lender as well. You can look for recommendations from friends and families and search for reviews online to get a better idea about the lenders.

Check the Loan Terms:

Make sure that you check the terms of your current lender as well as the new vehicle loan lender thoroughly. If the new lender is offering the loan at a cheaper rate, ensure that there are no hidden fees involved. Also, check whether you’ll be required to pay any kind of fee to the current lender for closing the loan on car and shifting to another lender. The fees and additional charges often equal to the amount you are looking to save by switching to another lender.

Ensure that you are fully aware of all the important aspects of the process before you get the vehicle loan refinanced. Before signing the documents with a new lender, make sure that you’d actually be able to avail the benefits of cheaper rates and better services with the new lender. Search online and use the auto loan calculator to get a better idea about the overall amount you’d be paying with your current and new lender.

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