Title: What Are the Benefits of an Auto Loan? | Pocketsense
Headings: What Are the Benefits of an Auto Loan?
What Are the Benefits of an Auto Loan?
Advantages Compared to Leasing
Refinancing Benefits
Early Payoff Advantages
References
Writer Bio

Content: Refinancing Benefits
Many companies will be happy to loan you enough money to pay off your old loan at any time, leaving you with lower monthly payments. Refinancing can save you money if interest rates have dropped since you bought the vehicle, or if your original interest rate is higher due to a previously low credit score that has improved. If you can afford your original loan payment, refinancing at a lower interest rate gives you the opportunity to apply the extra money toward paying off the auto loan faster. Unlike home refinancing, which requires a determination of property value, auto refinancing is dependent only on the amount of money you need to pay off the previous loan. 00:00
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Early Payoff Advantages
Auto loans that do not charge penalties for early payoff give you the flexibility of ending the credit agreement ahead of schedule, thus saving you money on interest. An early payoff will help improve your credit score, making it easier to secure loans in the future. Completing auto loan payments ahead of time will free up money to pay for other priorities in your budget. Another advantage is to pay off an auto loan with money from another type of loan that has tax-deductible interest, such as a home equity line of credit. An auto loan company requires you to carry a certain amount of insurance coverage for the duration of the agreement. You can reduce the insurance coverage by paying off the loan early and adjusting the policy to more affordable terms.