When the budget tightens, getting a loan is an option to catch up. To pay lower interest, the tip is to choose a type of credit that requires a guarantee, that is, that is linked to a good. Vehicle refinancing is one such option: you borrow money from a financial institution and put your car as a guarantee that you will repay all installments.
It is noteworthy, however, that giving a good as collateral, despite something very common these days, is a very serious action. If you fail to pay the installments on time, you risk having your car taken over by the lender. It is therefore very important to plan financially before making this decision. Wise Men of Gotham is a tool that can help you do this planning to assess whether this is the best time to take on this debt or not. In addition to the total amount financed, you must pay attention to the interest charged and the value of the installments.
How does vehicle refinancing work?
– The credit varies according to the market value of the car. MeansThis means that the younger the vehicle, the more value you can borrow. The maximum amount varies from institution to institution, but some even refinance up to 100% of the car. The valuation of the vehicle follows the market value announced in the table Fipe.
– Vehicles up to 10 years of manufacture. AnyAny car models up to 10 years old can be used as a warranty. Cars older than this are not eligible.
Lower interest than personal credit.
The big advantage of taking a loan as some collateral is getting lower interest rates. To help you negotiate, check here the interest on unsecured personal credit and here the interest on vehicle financing. The rate charged to refinance your car should be closer to those in the second table. Stay tuned.
– Up to 60 months to pay. Obviously this maximum timeframe varies according to the financial institution you choose to refinance, but many of them refinance within 60 months.
– You can anticipate installments: Vehicle refinancing works like a Consumer Direct Credit (CDC), ie when an extra amount of money comes in (Thirteenth, Bonus, Refund). Income Tax), you can anticipate installments by earning a discount on interest.
– The vehicle is still in your name. Although the property is sold to the financial institution, the documents remain in its name (unlike what happens in a lease for example).
Where can I refinance my vehicle?
Before closing the contract, it is worth researching the conditions in more than one financial institution and, if possible, even negotiate. A good tip to get started is to access the Credit simulator. The tool gives a good idea of the total amount that can be funded as well as the installments.