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Do you know that you can re-finance
your car? It is a simple procedure. If you
are getting better interest rates, go for the re-financing
of your car. 
Re-financing
helps you save money. Market conditions would have changed
after you financed your car. Perhaps, you might find
a better deal due to the market rate variations. For
instance when you bought your car, you took the loan
from company A, at 11% APR. After 6 months you find
that some other organization B, is offering re-financing
at 8% APR. You can take the advantage of such opportunity,
and save 3% per annum, which is a significant amount. Who
will refinance it? Most of the banks, credit unions,
and other financial organizations provide auto re-financing.
Their plan and rates vary from organization to organization. How
it works? Upon approval of your refinance, you have to provide
the information of your existing finance company, and
the car details. They verify all the information from
your present auto financier, and issue a check of the
total balanced amount, on the name of that financer.
It is known as paying-off.
When you receive this check, endorse it by signing at
the backside of the check. Send it to your present financer
along with a letter, requesting to close your account.
When they close your account, you should get the original "title" of your car and a letter stating that
you paid off the loan. Hence done.
You might have to send this original title to the new
financer, henceforth you become liable to pay your loan
with the terms and conditions to them. Entire
process can be step wise reviewed as:
- Step 1: Find out the best rates, plan and suitable
company. Understand the terms and conditions, suitable
for your need.
- Step 2: Apply for re-financing, either online
or by filling up appropriate form.
- Step 3: After receiving the pay-off check, send
it to the current financer, by endorsing (signing)
at the backside.
- Step 4: When you receive the original title back
from the current financer, send it to the new financer.
- Step 5: Your refinancing is done. Now new company
is your current financer.
Do's
- Talk to atleast 2-3 different financing companies.
Always compare rates among various agencies.
- Understand all the rules, terms and conditions.
- If you have a direct deposit for your salary etc.
to your credit union account, you might get better
interest rates. Inquire about these options.
- Keep a copy of every correspondence.
Don'ts
- Don't forget to do the bargaining.
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