Using Cash-Out Auto Financing to Help Pay the Bills

Are you in need of extra cash fast to pay those bills but don’t know where you can get it? Money in back pocketThe economy is still in crisis, no matter what the experts tell us. We’re looking at another government shutdown, and hundreds of thousands of people are facing layoffs and furloughs. Since unemployment is government-funded, this means it may not be available.

Fear not! You can actually use your car to help pay out some of those bills in the short term while this all gets settled. Here is how a cash-out auto refinance can help you take care of those bills in danger of stacking up and running past due.

 

Cash-Out Refi Process

A cash-out auto refinance works much the same as taking out a new refinance loan on your home. It is, however, much easier, faster and costs less. Most lenders don’t charge application fees for this refinance and it requires only a little bit of documentation.

The first step is to get a good sense of the value of your car, including its condition, accident history and maintenance records. Make sure you’re honest with yourself so you don’t run into unpleasant surprises during an appraisal. Following this process, you seek out a lender who offers refinancing and start applying!

 

Qualifying for Cash-Out Refi

Each lender has their own terms for qualification, and these can vary wildly from one to another. In general, however, the better your credit rating is the more likely you will be to qualify. Your payment history on your existing car loan is also an important factor to take into consideration.

The one thing that is certain is that your vehicle must have equity in it. This means that you have to have at least two years left to pay on your loan. You must still owe at least $7,500. The vehicle has to be under five years old, and must be low-mileage (no more than 75,000 miles). Talk to your lender of choice to find out what other qualifications and requirements they might have.

 

Benefits

The most obvious benefit of this kind of approach is extra money in your pocket, at least in the short term. Other major benefits include better finance terms such as a lower interest rate and lower monthly payments. This frees up even more money each month to take care of bills.

Especially if your credit has improved since originally buying your car, this kind of loan can be a great option. You can see your interest rate reduced from 11 percent or higher down to 5 percent or below with the right credit score and qualifications. For those facing a layoff or furlough, lower interest means lower payments and more money saved — a definite benefit!

 

Are you facing a difficult financial situation and think that a cash-out auto refinance can help you with those problems? If so, we might be able to help. Take a look at the services we offer, and get in touch with us today for more information.

Posted in: Credit Myths

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