Most of the car buyers might have to undergo through the nightmare of auto loans. You were in the midst of various thoughts, while taking that auto loan for buying a new car. Thanks to your good credit score, financial institutions find no problem while sanctioning your loan. Now, it is time to repay that amount with the current interest rates. The amount is huge, and repaying it seems to be a crucial task for you. If you cannot take proper steps quickly, more penalties will be imposed on your shoulder, making payment impossible, even if you try it hard. However, there are some advantages available to pay off your auto loans with the help of a credit card.
Save a lot of money
It might sound a little bit weird at first, but using credit cards for paying off auto loans can help you to save a lot of money. It can further help in keeping the scenario abstract. Recent statistics have indicated that in the US, 8 of the major ten credit card companies are allowing to transfer your auto loan to a credit card. It will not just help you to take advantage of lower interest rate, but will make the credit card debt to remain unsecured. It will not be backed up by the present value of your vehicle.
Attractive option for you
There are various advantages of transferring your auto loans in credit card sector. If you are lucky enough and have come across the best credit card companies, then you can find those cards offering you with 0% rate for a time span of 18 months! You should get along with the reliable issuers, offering auto balance transfers. These firms have a separate fees and finance charges, which will be less than what you have expected. However, please be sure to check out the interest rates before making a move.
Going through the interest rate
It is a known fact that if the interest rate is somewhat around 4% of even less than that, then you are not going to get much benefit from the cards. However, if the rate is higher than that, then there are high chances of saving thousands of dollars and more. In case, this option is not quite enough for you; then there are some other benefits waiting for you, while transferring auto loan into credit cards loans. For that, proper research is mandatory.
Avoid the GAP payments
If you can transfer the auto loan amount into credit card loans, then you can avoid making any GAP insurance payments. Most of the lenders would like their borrowers to pay Guaranteed Auto Protection insurance to offset risk, relating to default, if the loan exceeds the current value of your car. This Gap cost is mostly around 5 to 6% of the comprehensive auto insurance and annual collision premiums. You can easily eliminate this entire cost by transferring your auto loans into credit card loans. However, to avoid any credit card debt help, you should make the credit card repayments on time.