November 21, 2014
Refinancing is the process of taking out a new loan to replace your current car loan.
Did you know that not only can you refinance your car loan, but in the process you may even find that you gain considerable financial benefits from doing so.
Daniel Meade, your mobile loan expert from Mortgage Choice in Brisbane can look at your financial circumstances, and help you see if it’s worth considering refinancing your own car loan.
The benefits of refinancing your car loan:
- Your repayments could be lower
When you took out your car loan, most likely you would have been on a fixed rate. Have rates reduced since then? If they have fallen since you first took out your loan, then by refinancing, you could potentially secure a lower rate and therefore save on your overall interest charges. It will also mean you will pay less on your ongoing repayments.
For some, it is also an opportunity to extent the time you have to pay out your loan, the loan term. This means you can increase your personal cash flow, by lowering your regular repayments.
- Savings on fees
Does your current loan have a monthly fee attached? Some car loans charge a monthly account keeping fee – which ultimately adds up significantly over the entirety of your loan. Often you can avoid these fees with new products available via refinancing.
- Flexibility within the loan
Can you make additional repayments on your current car loan?
What about redraw?
Car loans are becoming more and more flexible, and plenty offer handy features similar to home loans, that make them easier to live with and pay off sooner.
- Equity in your Car loan
Similar to home loans, when the value of your home increases, or you pay down your loan, you gain equity in your property. Car loans work the same way, in that if your car is worth more than the balance of your loan, then you have equity in the vehicle.
These days, similar to home loans, you can even access this equity and use it as funds for other purposes, such as minor home improvements. It might help if your car is one of those really flashy ones worth a fortune that most of us only dream about owning!
What about the costs
Yes, there may be costs involved with refinancing your car loan. Perhaps an early payout fee to close down your current loan, and most likely you will be hit with an upfront application fee for the new loan.
It is vital that you make an informed decision about if the costs of refinancing are less than the benefits and savings of the new loan. Your Mortgage Choice broker, Daniel Meade, has an large panel of lenders all with competitively priced loans available. He can help you crunch the numbers to see if refinancing your car loan will put you in front financially.
For more information on car loans, we have a series of blogs, including:
Daniel is ready to help you with your car loan needs, so if you want to learn more about your finance options, please call 07 3833 9666 or email email@example.com today.
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This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.
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