What it Means to Trade a Vehicle or Refinance the Loan

Whether you refinance or trade in your vehicle, you are essentially renegotiating the terms of your current loan. Refinancing a loan may allow you to cash in equity in the vehicle or get a lower interest rate. In some cases, you may want to condense the loan term to accrue equity faster.

Trading in a vehicle allows you to use your equity toward the purchase of a new car or truck. Trade values are negotiated at a dealership and based on the condition of the vehicle and other factors. The loan on the current vehicle is paid off or rolled into the loan for the new car or truck.

You may be able to get a variety of quotes before you ultimately decide to go through with the trade. It may be worth asking your lender for the exact pay off amount before disposing of your vehicle.

 

 

Categories: Finance
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