Refinance A Reaffirmed Auto Loan Agreement
Millions of people have filed bankruptcy the last few years and are now facing the ramifications of doing so. One question many have is whether you can refinance a reaffirmed auto loan agreement?
The last few year have been so bad economically that they are often referred to as the Great Recession. Moniker aside, millions have defaulted on debt and looked to the bankruptcy courts for protection. What have they found? A rather cruel twist. The bankruptcy laws were changed just before the economic collapse and it is now much harder to get rid of one's debts. Strategically, many reaffirmed certain debts.
So, can you refinance a reaffirmed auto loan agreement? Yes. Absolutely. Why? Well, you need to think about what has happened. You've sought bankruptcy protection. You may think lenders view this as a bad thing, but they really don't. Instead, they view it as a safety mechanism. How so? Well, you can usually only file bankruptcy every seven years. How long is a car loan? It is less than seven years and that means the lender has a lot more protection than with a borrower who has not filed. Strange, but true.
This doesn't mean you aren't going to run into issues when trying to refinance. The first is simply a sign of the times. Many people are having trouble getting loans these days for no other reason then there isn't a lot of money being loaned out. It isn't a matter of your credit being good or bad, the credit markets are just locked up. As a result, you may have to shop around a lot to find a lender who is actually lending.
A second issue is whether you should refinance a reaffirmed loan. While you can get these loans, the same logic of low lender risk does not extend to the cost of the refinanced loan. To be frank, most lenders are going to work you over. You can expect high fees and even higher interest rates. This isn't always the case, so check around. Regardless, it does raise the issue of whether taking this action is a good financial move in the long run.
Can you refinance a reaffirmed auto loan agreement? Yes, but make sure market conditions are such that you don't get taken to the cleaners doing so. As always, shop around to see what various lenders are offering.