While some people see refinancing as a way out of a high-interest car loan, some experts do not really think it’s a good idea.
Financial adviser and president of Soloff Wealth Management Group Adam Soloff told the CBS News in Philadelphia that there are several factors to consider before refinancing a car.
Soloff said that people should look at the interest rate and specific terms that their current car loan has. Refinancing may make sense depending on those two factors, he added. Many car owners do not look into these when they plan on refinancing their cars.
Soloff clarified that he and fellow financial advisers do not advocate “leveraging assets in order to obtain additional cash as opposed to using your house with a similar plan of tapping into the equity.”
Refinancing a car for a lower monthly payment makes sense if you are in a critical situation like if you have been laid off, said Soloff.