Posted by
sroth |
So a lot of companies advertise that you can skip car payments when you refinance your auto loan. It seems counter intuitive that a company that wants your business would let you skip payments considering that is what they are going to want you to do for the years they have your loan on their books. However that is exactly what happens. It is a funny quirk of the system that you actually get to miss a payment when you go through this process.
When a company refinances your auto loan, they must pay off your existing bank or finance company with a lump sum. Interestingly enough this counts as a payment to your old company, but not your new company. So you just get to take a break from making payments until your banks figure out your new loan. The time between payments varies from company to company, however you should almost always have time between when you would have made your payment and when you have to make your payment with your new company.
There is no drawback to this except for now it will take a days longer to pay off your loan, but no extra money comes out of your pocket. The skipped payment happens everytime you refinance your loan. So these banks are advertising completely honestly when they talk about skipped payments.
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