Solve your doubts! Refinance your car

During economic downturns, having a liquidity problem that makes it difficult to pay off a car loan is something that many people cannot avoid. And when the situation is critical, one of the best solutions is to “refinance a car,” which is a method that can help manage the payment burden effectively.

However, even though this term is familiar, I believe that there are probably many people who still do not clearly understand what car refinancing really is, including many other questions about this process, such as how much interest will I get if I refinance a car? How many years does it take to refinance a car? And many other questions This article will provide a complete explanation so that you can make an appropriate decision. Follow along.

What is car refinancing?

Let's start with the question of what car refinancing is, which can be explained briefly as follows: Car refinancing is a financial process that allows borrowers to restructure their existing car debt to make it easier to pay off. It involves requesting a new loan from a bank or other financial institution to close the existing car loan debt. Of course, car refinancing has many benefits for borrowers, as follows:

Reduce interest rates: Car loan interest rates are a major obstacle in repayment. Therefore, refinancing to a bank that offers lower interest rates will help increase liquidity.

Adjust the repayment period: Refinancing can adjust the repayment period, reducing the monthly installments but for a longer period, suitable for those with liquidity problems.

Change contract terms: Refinancing can change the contract terms, such as the type of interest rate.

How many years do I have to wait to refinance my car?

Another popular question about car refinancing is "How many years do I have to wait to refinance my car?" It must be explained here that there is no fixed explanation, but it depends on the conditions of each financial institution. However, generally, financial institutions will allow car refinancing after more than half of the total debt has been paid, or if compared in terms of time, it will be about 1-2 years. However, it is recommended to check with the bank you want to refinance for a definite answer.

What are the expenses of car refinancing?

Although car refinancing helps increase liquidity in installment payments, But don't forget that refinancing also has costs for the process to be completed. You should consider whether it is worth refinancing or not. The list of costs is as follows:

Loan arrangement fee: It is like a bank service fee, calculated at 1-2% of the loan amount. However, some places have promotions that free this fee. You should check carefully before deciding.
Early repayment penalty: The old bank may charge a penalty if the loan is paid off before the due date. Therefore, it is recommended to check the contract before refinancing.
Collateral appraisal fee: The new bank will assess the current price of the car, which is usually 1,500 baht or 0.25% of the appraisal price.

Stamp duty: It is calculated at 0.5% of the loan amount.

As for the question of how much interest will be received if you refinance your car, you must have the answer that there is no clear answer. Because the new bank or financial institution will offer a lower, the same or higher interest rate than the old interest rate, depending on the agreement in each case.

A woman is calculating how much interest will be received if she refinances her car.

If she has missed an installment payment, can she refinance her car?

For those who want to refinance their car But have a history of overdue installments and have doubts about whether you can refinance your car or not? The answer is yes, but what you need to do is pay the overdue installments in full. Even if you have paid the original installments in full, the chances of refinancing will be more difficult than before because the financial institution will consider you a high-risk debtor, reducing the chances of being approved for refinancing. However, it does not mean that there is no chance of refinancing success.

Autovilla buys cars with finance, easy to sell, get money immediately

Once you understand car refinancing in all aspects, anyone who is having problems with car installments should not forget to refinance because in addition to helping to reduce the financial burden, refinanced cars can also be sold. And if you are looking for a place to sell refinanced cars that offer good prices, we recommend Autovilla. We have a service to buy cars with finance of many models and brands, easy to sell, get money immediately, helping to reduce the expenses from car installments that must occur every month. For more information, please contact

Srinakarin Branch Tel. 097-921-9552

Romklao Branch Tel. 095-906-0633

Lam Luk Ka Branch Tel. 092-940-5098

Reference:

What is debt restructuring? Retrieved March 20, 2024 from https://www.bot.or.th/th/satang-story/managing-debt/debt-restructuring.html