Sell your Car or Opt for Car Refinance
Sell your Car or Opt for Car Refinance; Which is the Better Option? When you apply for a car loan, you try to get the best terms, but sometimes, better terms present themselves right after your loan closes. If this happened to you, you might be wondering, “How soon can you refinance a car?”
The good news is that you can refinance a car loan in as little as one month. It all depends on how quickly the car dealer and the Department of Motor Vehicles process the paperwork. After the paperwork has been processed, you will be able to immediately apply for a car loan that offers you a better interest rate and better loan terms.
Why Trade Your Car into the Dealer?
People rarely drive the same car for decades because their needs change as time goes by. For example, what was adequate for you when you were in college will not be after you get married and have a few kids.
At the time, you could easily afford the higher car payment, but you may want to lower the amount of money that you are spending every month now. According to Lantern by SoFi, “Americans pay $554 every month for their car payments.”
What Does It Mean to Trade in Your Vehicle?
Refinancing may not necessarily be the best option for you. It may be better to trade your car into the dealership. After the dealer determines what your car is worth, this amount of money will be the down payment for a new vehicle.
What Does It Mean to Sell Your Vehicle?
In this case, you will sell your car to a private buyer. The drawback is that you would have to do everything, including the advertising and the titling. It would be a long process, but you would receive more money than you can get from a dealership.
What Is a Car Loan Refinance?
When you refinance a car loan, you will be taking out a new loan. To make this worthwhile, the new loan will need to have a lower interest rate. If car loan interest rates decrease a couple of weeks after you purchase your vehicle, it’s not too late to refinance your car loan.
Once you have a lower interest rate, it will lower your monthly payments. You can also refinance if you are getting a divorce and you need to remove your spouse’s name from the loan.
Refinancing doesn’t require that you have the best credit scores. Your scores can be in the low range, and you can still refinance if you need to do so.
How Does It Work?
First, obtain a payoff statement from your lender that tells you how much you need to close your current loan.
Second, contact Lantern by SoFi so that you can find a loan that will give you better terms than the terms you have with your current lender.
Third, you will close on your new loan with your new lender. The new lender will close your original loan by sending a payoff check to the lender. The new lender will be listed as the title lien holder, and you will begin to make payments to the new lender.
If your credit score has improved since you applied for your car loan and you believe that you can qualify for better loan terms, refinancing may be advantageous for you.