Vehicle Refinancing Fees: Advantage or Disadvantage | Car Loans

In a time of crisis, high unemployment and the accumulation of debt, some individuals resort to borrowing, whether personal, payroll or revolving. However, in addition to this option, vehicle refinancing can be very useful in emergencies.

But what is vehicle refinancing?

But what is vehicle refinancing?

It is a kind of loan which the vehicle of the person will be given as collateral for payment of benefits. The bank in which the deal is made issues a document that blocks the sale of the vehicle (called a “divested”), but the person still owns it.

If the owner of the vehicle does not repay the loan installments with the bank, the institution has the right to take the property and put it up for sale. Importantly, this loan is not just for repaying vehicle finance, but also for other financial needs of any category.

If the vehicle has already been repaid or not, it does not change the fact that it can be used for refinancing, if you buy it financed and not finished paying, you can refinance it to repay the financing itself, but part of the amount has to be used to pay off the financing already made, and it is also necessary that the number of open installments is not too high, it is preferable to pay only the final installments of the first financing. If in doubt please contact the institution where the funding was made.

Documents Required to Refinance

Documents Required to Refinance

Some institutions perform the process via the internet.

The following documents will be required:

  • ID
  • CPF
  • CNH
  • Proof of income
  • Proof of address
  • Vehicle Registration Certificate (CRV)
  • Vehicle Registration and Licensing Certificate (CRLV)

The “age” of the vehicle is also important as refinancing with a vehicle older than 10 years is not allowed. And it must also be in the name of the person applying for the loan.

The loan amount must refer to at least 80% of the value of the vehicle that will be used for refinancing, and may be paid in 48 installments, the interest rate is lower than the other loan modes.

Is it worth refinancing a vehicle?

Is it worth refinancing a vehicle?


The interest rate is lower than that of other types of loan, because if the installments are not paid the bank or institution can take the car of the person who borrowed.

The number of installments is advantageous, as it is allowed to install up to 60 times, and can be used for any type of debt, not for a single one.


The car cannot have more than 10 years of manufacture. The condition of the car (servicing) can also affect the loan amount.

Another disadvantage is that the person may lose the vehicle. The bank has the right to sell the vehicle to settle debts of unpaid installments.

First of all, analyze your current financial situation, see if you are able to borrow and repay all installments. Do not let the loan become another debt and do not risk losing your vehicle.