When you apply for a personal loan, you agree to pay back the amount owed by a certain due date. However, financial or personal reasons may come up that could make it difficult to meet this deadline. To stay on track in making your payments on time, you could choose to refinance your personal loan. Refinancing involves contacting your lender and requesting a change to your debt repayment schedule.
Here is how to refinance your short-term loan:
Review Your Loan Contract
Before asking for the option to refinance, be sure to read over your loan contract again. The contract should include the details for repayment, such as the due date and the amount owed, which should allow you to decide whether you need to refinance. If you believe you are unable to meet this deadline and repay your debt fully, then you could choose to refinance.
What Refinancing Means
The refinancing process will allow you to be approved for a new loan that you could use to spend on the finance charges for both new and old loans or apply toward the principal of a loan. When refinancing, you should expect to pay the same costs as the original loan except in cases when there is additional principal added. When you choose to refinance your loan, you will be subject to a finance charge that is determined by the amount you borrow. You should also be aware that refinancing may mean that you will pay more during the life of the loan compared to if you had paid the loan in full by the initial due date.
State Restrictions for Financing
Some states may not allow borrowers to refinance their loans. When this is the case, you could call your loan provider and ask for a courtesy extension to repay your loan based on your current financial situation. Other states also have rules that restrict the amount borrowers can to obtain for their new loans. It’s important to check state regulations regarding lending for personal loans and how these rules may impact the loans offered by a chosen loan provider and your ability to borrow.
If you decide to take several refinances, check with your state to see how many refinances you are allowed. Whether or not you refinance, make sure that you know all of the terms and conditions of your loan. For more information on refinancing your personal loan, contact Cash Central.