The Benefits of Refinancing Your Car LoanBefore you look at refinancing your car loan, take the time to really understand the reason why you want to do it. Of course, everybody wants to be in a better financial situation – no matter where you are on the ladder – but just because there’s a lower interest rate on offer, doesn’t necessarily mean it’s going to improve your situation.
Why do you want do it?
Are you in a financial ‘pickle’ and looking for ways to improve your cash-flow? Or perhaps you’re tired of making that monthly repayment and want to speed up the process to owning the car outright. Irrespective of your situation, there are several reasons why you’d want to refinance:
- Extend the loan term: If you want to reduce the pressure of when you have to pay off your car, then opt to lengthen your loan term. This means you have longer to pay off the car, so you can relax a bit more.
- Lower your repayments: If you want to have more cash left-over in your account each month, then extending the term your loan will do just that - as it results in lower monthly payments.
- Improve the interest rate: If your current interest rate is too high (meaning, you’re paying too much interest!), refinancing could allow you to score a lower rate. Getting a lower interest rate won’t just reduce your repayments, but will save you money over the course of the loan.
- Increase your cash-flow: Perhaps you just need more money for other things in life, so negotiating a longer term and/or a lower interest rate will improve your cash-flow since less is needed to make the monthly repayment.
- Faster payout: Refinancing isn’t all about extending the length of the loan. If you are in a position where you’d like to pay your car off quicker, you can look to refinance on a shorter term.
Before you make any decisions about refinancing, you’ll also need to consider if making the change is worth the effort. For example, you may have to change lenders and repayment dates, which could throw a spanner in your current budget.
Also remember, there could be high loan payout fees and you might not get a better interest rate than what you currently have. So what should you do?
Make the right decision
You definitely need to speak with a professional broker .Experienced car finance brokers will find out why you’re looking to refinance, review your financial situation, check penalties and current rates – then let you know if it’s worth your while to go through the process.
By chatting with one of our team members, they won’t just save you the time and headache of dealing with individual lenders and their call centres – but will ensure you can achieve the goal you want with refinancing. Helping people like you is what we thrive on, so pick up the phone 1300 301 051 or contact us here for an obligation free chat today.
DISCLAIMER : The thoughts and opinions conveyed on this website are those of the authors only and are of a general nature. This does not constitute financial or general advice to you from Auto Loans Group. You should seek your own independent advice from a professional which is specific to your circumstances before considering any of the items referred to in this article, including finance, insurance, and car buying.