Have you considered using your car to get a loan?

Here are five steps for you to refinance and get the loan you need.

Have you considered using your car to get a loan? Refinancing vehicles, like other loans, charges interest and has rules to be approved. If you are interested in getting this money, check out the six basic steps of how to refinance your car.

Remember: Depending on the valuation value and year of manufacture of your vehicle, the amount of the loan may change. That’s because the car will be used as collateral for the credit. See the following step by step!

How to refinance vehicles

Check out below 6 ways to refinance vehicles.

1. Remove the vehicle to be refinanced

Most banks will not release the loan when the car is still under financing. In this case, there are two options. The first is to look for banks that accept this debt and refinance an alienated car . Then, part of the money from the refinancing will take away the car and the rest will be with you. If you receive a proposal like this, be aware of the conditions and fees offered.

The second option is indicated for those who are at the end of the financing and need the money a lot. That’s because maybe it will pay off the balance to have more options for banks to refinance (and pay cheaper for it).

2. Arrange the car documentation and your documents

In addition to preferring a car removed, the bank requires that the vehicle be in the name of who will ask for the refinancing. This condition has a reason: when you take out the loan, the car stays as collateral until you take out the last installment. This means that if you fail to pay what you owe, you may lose the car.

Once you have regularized documentation, if the vehicle is not in your name, separate these papers:

Client: copy of RG and CPF, proof of marriage (for married couples) and proof of income and residence.

Vehicle: copy of RG and CPF or copy of the National Driver’s License (CNH), Vehicle Registration Certificate (CRV).

3. Look for the refinancing of vehicles in three banks

The rates of every loan change according to the bank. The best way is to find at least three places that refinance vehicles and ask what the interest rate is and the Total Effective Cost (CET) in each. To help you with this comparison, click here and check the interest rate for refinancing vehicles at various banks.

4. Wait for the result of the car evaluation

Once you decide where to refinance, know that the loan will still depend on an analysis done by the bank. When you ask for the proposal, the bank will check the documentation and the market value of the vehicle. So when the loan is approved, you will know exactly how much money it will take and how much time it will take to pay off the debt.

Refinancing typically frees up to half the car’s value and allows you to commit up to a maximum of 35% of your income. This means that depending on the money you have to spend every month on the debt and the value of your car, the credit released may be higher or lower.

Stay tuned for the year of manufacture of the vehicle! Cars older than ten years are not usually refinanced by banks. And know that the bank charges for this assessment even if you do not approve the loan later. So ask how much you will have to pay for it.

5. Sign the vehicle refinancing agreement

Once the refinancing has been released, you will have to sign the agreement and wait a few days before receiving cash on the checking account. Take this moment to clarify any doubts.

Take advantage and check out eight questions and answers about refinancing vehicles.