Anyone who wants to have a car loan replaced by a new loan must have their creditworthiness re-evaluated. Especially when a new lender is taken, all documents have to be presented again.
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The customer must prove that he can also pay the new loan. It is not uncommon for a loan to be increased when a debt is rescheduled. This happens especially when the vehicle has already been sold and a new car is to be financed. The credit bureau and the income are checked.
The employment relationship must also be checked. Anyone who has a fixed-term contract will not be able to take out a large loan amount. It is different with people with permanent employment contracts.
New application for a new loan
The customer must find a lender that accepts debt restructuring. This loan is not that rare.
In order to replace a car loan with a new loan, many require the presentation of the old loan contract. As soon as all documents have been checked, the customer is informed whether the loan amount can be paid out.
For some consumers, a low salary or poor credit bureau creates difficulties. Banks do not take credit risk, so in some cases additional credit security is required. This must be able to secure the loan so well that there will be virtually no default. This is the only way to have the car loan replaced by a new loan.
Replacing car loan with new loan – at the final installment?
It is not always clear to the consumer which loan to take out. In order to have a car loan replaced by a new loan, both a new car loan or a classic installment loan can be taken out.
In the case of balloon financing, it is often the case that further financing follows with a classic installment loan. If you look at the interest rates in a loan comparison, you will hardly notice any differences. Here the customer has to recalculate which loan is the cheaper one. He also quickly noticed that not all lenders also give a car loan with an installment loan.
Interest rates are very important when comparing credit. But other factors should also play a role in the selection.
Debt rescheduling at car bank or direct bank
A debt rescheduling can be started at an auto bank. However, this is often only possible if a new vehicle is to be financed. Then the loan amount can be adjusted to the purchase amount and the remaining amount. With a direct bank, however, several forms of credit are possible.
If you take out an installment loan, for example, you do not have to deposit the vehicle registration document as loan security. This has the advantage that the customer can do whatever he wants with the vehicle.
If he wants to sell the vehicle after two years, this is not possible at car banks. As a rule, these always require the vehicle registration document as credit security. As long as the loan is not paid off, the car cannot be sold.
Reduce overall costs – how it works
If you want to reduce your overall costs, you should pay attention to a few things when replacing a car loan with a new loan. It should always be noted in the contract that a special repayment is possible.
If this is done, the runtime can be shortened. The customer saves interest once a year free of charge. A car loan can often be repaid without any prepayment fee. If you cancel your loan early, you should pay attention to what has been agreed in the loan agreement.
Some lenders charge a fee, which can be very high. Then it would not be worthwhile to have a car loan replaced by a new loan.