When restructuring a car loan it is possible to receive the following benefits:
• To increase credit validity period (result: reduction of monthly payments);
• To have a delay opportunity for loan pay off or to reduce percentage loading.
Loaning up is profitable only in that case if:
• Borrower has not paid considerable part of the loan;
• Financial institution ready to refinance the debt offers lower commission percentage for the credit;
• The bank which issued the initial credit has no penalty on early repayment.
Before addressing to other bank for registration of the contract for loaning up it is necessary to study thoroughly conditions of primary agreement regarding the availability of penalties for pre-term loan repayment, and to count the forthcoming expenses on insurance and contracts for a loan and pledge renewal. If not to consider all this the benefit from registration of loaning up agreement may be rendered null because of unforeseen expenses.
To arrange the loaning up agreement is useless if there was a year or some months to termination of primary agreement. But this step can be justified if the client decided to change the contract for more modern model purchased according to the existing credit liability.
By the way, if the borrower intended to sell the car bought on credit by means of the urgent redemption of credited cars, at that for the gained money to pay off the available debt having arranged a new one, these actions have no relation to loaning up.