You have probably heard of auto refinance before. Or simply refinance. The term "refinance" actually refers to a financial situation wherein a borrower finds financing to pay off a current loan. Refinance is often put into practice in home buying. In fact, refinancing is one of the most popular methods of getting financing for a home loan. With auto refinance, the same thing applies. Auto refinance is basically paying off one loan with a new loan. The goal of auto refinance is to allow the borrower to save some money from your monthly loan obligations. And as such, it is one of the best kept secrets in the financing industry. For years now, people have refinancing their homes and saving thousands of dollars. However, the practice of refinancing car loans has yet to be indulged by most. Why? Perhaps the reason is that auto loans generally behave differently from home loans and people are naturally skeptical about new methods. Regardless, auto refinance is still a good choice, provided that the situation is right.
When to get an Auto Refinance Loan
The only way for auto refinance to work is if you get it when the interest rates are low. Mortgage rates tend to move with interest rates. Therefore, if interest rates are low, then it's likely that mortgage rates are low also. Low mortgage rates typically mean low monthly repayments and this then is the situation you should aim for.
Only few people really understand the time value of money. Keep in mind that the longer you pay for a loan, the bigger amount of money you actually spend for it. Thus, by the end of the loan period, you would have paid more money on interest than on the principal. This is why auto refinance is important for it is one of the few methods that could help you minimize loan costs and maximize your savings.
Who can benefit from Auto Refinance?
Almost anyone with a loan to his name can benefit from auto refinance. Even car buyers with bad credit can obtain auto refinance as a way for them to lower down their APRs. Let's say, for instance, you make an auto refinance loan for $16,500 on a new Honda Accord. At the end of six months, you agree to pay off the amount at 21% APR. So for a few months, this will be your monthly loan obligation.
Then, you decide to take an auto refinance loan. However, this time, your loan ate is at 6% APR. Your current monthly payment is $446 which gives you total interest charges of $10,283 at the end of your loan period. Your auto refinance loan offers you a monthly payment of $319 with total interest charges of $2,639. Thus, by refinancing, you can save up to $7,600.
Debit and Credit - Learning Accounting Basics
The terms ‘debit’ and ‘credit’ can be confusing when learning accounting for the first time but why is that? If you go to the bank and put money into your account then teller will say, “I am crediting your account with X amount of dollars,” on the other hand take money out of your account and the teller will say, “I am debiting your account X amount of dollars.” Plus with debit machines everywhere and everyone carrying at least one credit card these two terms take on a whole new meaning.
How to Refinance Your Home
There are several reasons why you should consider a refinance mortgage on your home loan. When you refinance your home, you can cut your monthly mortgage payments. In addition, you can tap into your equity, or your home value, in order to pay off other loans and credit cards. This in turn helps you to deduct your mortgage interest from your taxes.
Is A Home Equity Credit Line Right for You?
Using credit lines against the equity of your home are one source of consumer credit that is fast gaining popularity. Home equity is a valuable asset which both lenders and borrowers can benefit from and as such, lenders are offering home equity credit lines in a variety of ways.
