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Refinance a Loan
Refinance a Loan Refinancing a loan involves replacing an existing loan with a new loan, ideally one that offers a lower interest rate and more favorable terms. If you refinance your loan, you may be able to save thousands of dollars over the life of the loan. Here’s a closer look at what it means to refinance a loan.
What is loan refinancing?
Loan refinancing can allow you to replace your current loan with one that is more affordable and works better for your budget and needs. If you go this route, you’ll receive an updated agreement that takes the spot of your old agreement and previous loan terms. Refinancing a loan often makes borrowing money more affordable.
Types of loans that can be refinanced
There are a number of loans that you can refinance, including:
Payday loans
Payday loans are short-term, small dollar loans that can help you cover expenses before your next payday. In many cases, you can pay these loans back within two to four weeks, once you get your next paycheck.
Installment loans
Installment loans give you the chance to borrow a lump sum of money at once. You can then pay back the loan over a set period of time via fixed monthly payments.
Title loans
Title loans are secured loans that use your car as collateral. If you own your car, you can exchange your title for a lump sum of cash. You can continue driving your vehicle as you repay the loan.
Student loans
Student loans are designed to help you pay for the cost of education. You can take out private or federal student loans when you go to college or trade school.
Mortgages
Mortgages are used to purchase homes. Most mortgages come with terms of 15 or 30 years and allow you to own a home without paying for it all in cash at once.
Benefits of refinancing a loan
Refinancing a loan offers many advantages, including:
Extend your loan term If you have the option to extend your loan term through refinancing, you may enjoy lower monthly payments and free up your cash flow. This could be very useful if your current payments are too high.
Get better interest rates
By refinancing, you may be able to secure a loan with a lower interest rate, especially if you have better credit and more income than you had when you initially applied for the loan. A lower interest rate could save you thousands of dollars in the long run.
Pay off your loan faster
Since refinancing can help you lock in a lower interest rate and lower payments, you may be able to pay off your loan faster. This can help reduce or get rid of your debt and alleviate some financial stress.
You may be eligible to get a larger loan amount
If you weren’t approved for the loan amount you wanted at first, refinancing may help. You may now be able to borrow more money and meet your needs.
How to refinance your loan
To refinance a loan, do some research and find out which lenders may be able to help you. Once you receive a refinancing offer you like, compare the new loan to your current loan. Make sure it will benefit you before you move forward.
If you decide to refinance, the lender may make it easy for you to pay off your current loan with your new loan. They may pay off the loan directly for you or transfer funds to your bank account so you can do it yourself. After you confirm your old loan is closed, start to make payments on your new loan.
You can refinance an Advance America loan
With an Advance America loan, you may be able to refinance payday loans, installment loans, and title loans, depending on which state you live in. Our loans come with convenient online applications and fast funding. Visit Advance America today to learn more about the loans we offer.
