Mistakes to Avoid when Refinancing

Refinancing is a strategy to save your finances. When jelly, profits can be obtained . But it could be a big loss if it made a lot of mistakes. In order to avoid it, it's good to know some of the following mistakes so as not to lose money.

1. Paying Car Installment that Has Been Damaged

Before the tenor is determined, it should be considered whether the time is worth the value of the car. Because many people still have to pay car payments when the condition of the car has started ugly and damaged. Existing expenses are getting bloated as it takes money to fix the car. And you still have to pay the installment in any car condition. Obviously, it's better to pay off your car as soon as possible.

2. Extension of Tenor Period

There is a long tenor's assumption that it pays more, and vice versa. The reality is inversely proportional. If you want a light installment, choose a long tenor. If able to pay larger installments, choose a short tenor. Therefore, it is necessary to calculate the financial capability and select the appropriate tenor. Do not let refinancing even harm.

3. Delaying Refinancing Too Long

If you have decided on refinancing, do it immediately . If putting it off could be a huge loss. All that depends on the prevailing interest rate. Usually a good interest rate applies to a new car or the condition is still good. So, refinancing is difficult for cars that are too old.

4. Penalty Fines

First know the terms and conditions before the refinancing application. Calculate the feasibility by comparing the benefits to be gained, from costs or fines that may arise. One of them is fine when repayment is accelerated. If the penalty is greater than the profit, better find another financing institution.

5. Skipping Payments

A good credit history greatly affects the approval of refinancing. If you change your creditor, it is very necessary to know when you can stop paying the installment on the old creditor and when to start repaying in the new creditor. Do not get less information, so you can be late to pay.