A greater number of savvy Australians are looking to hack their current short term and long term expenses and boost their savings through car loan refinancing. Car loan refinancing is becoming more and more accessible for consumers to give greater control when repaying existing car loan debt.
The goal of car refinancing is to compare current car loans and renegotiate for new and better terms on an existing car loan for a better rate on current car loan repayments. Consumers all across Australia are taking advantage of car loan refinancing to save big on short term and long time expenses.
Read on to know to find out how to take advantage of car refinancing to save long term on your car loan.
What does refinancing a car loan mean?
Car refinancing is an avenue for consumers to get a better rate on their current car loan and the amount owed on their vehicle. Refinancing gives you the means to opt for an alternative way of paying off the finance on your car loan, with the intention of having better and flexible rates and terms.
Different lenders at different times have variable rates on their car loans, when you initially entered into a contract with your current lender your rate may be significantly different to what either the same lender or a competitor in the market is offering at the moment. Taking out a new loan may mean you can decrease payments on your loan over the life of your loan.
Should I refinance my car loan?
Refinancing your car loan is a great option to consider if you do not believe you got the best rate when you purchased your vehicle. At CarClarity we talk to customers all the time who take the first financing deal they can at the time, due to a lack of education of their car finance options or a need to be behind the wheel quickly, without comparing the market rates or dealers. These consumers often have no idea what their current interest rate on their loan is, just how much their weekly or monthly repayments come out to be.
Lenders also only tend to only consider the current status of their customers at the time taking out the loan, however, if these factors change customers do not see the automatic benefits and therefore may be paying too much on the life of their loan.
Pros of refinancing a car loan:
Lower interest rates on car loans - Comparing your current car loan to a new lender can offer a lower interest rate than your current rate. Lower interest rates won't only put more money back into your pocket in the short term but will lessen the total amount you pay overall.
Longer loan term - You can cut your regular repayments by extending your loan term. Each repayment is lower because the repayment of the loan principal is divided by more months.
Add or remove a co-signer - You may want to remove a co-signer from the loan or to add one, which can get you a better interest rate if you have bad credit.
Get a new lender - If you find your current lender difficult to deal with, you maybe able to improve the situation by getting a new one.
The significant benefit of car loan refinancing in 2020, due the current climate, is the number of better car loans in the market is a lot higher with a larger number of lenders offering more flexibility and lower interest rates on some of their most popular policies, helping individuals who refinance the ability to save more.
Potential cons of car loan refinancing:
More total interest - If you negotiate a longer loan term to reduce repayments you could end up paying more in the long run. This is because you will have money outstanding for longer so you will pay more interest.
Entry and exit fees - If you find your current lender difficult to deal with, you maybe able to improve the situation by getting a new one.
How to refinance a car loan
Traditionally to refinance a car loan and get a better rate you have needed to find a new lender and negotiate directly for better terms. When your car loan refinancing request gets approved, the loan amount you get from your new lender pays off the balance from your existing contract and then it has been necessary for your to close the account with your previous lender once you have paid the balance. Afterwards, you will get into a new agreement with your new lender.
CarClarity is the newest service so Australian’s can get a better rate on their car loan without needing to undergo the traditional refinance process. As your personal car finance broker all we need are the details of your current loan and our advanced calculator will determine how much you can save on your current car loan. Once you agree to the savings we do all the negotiating and transfers over to your new lender or plan so you get all the benefits without any of the back and forth.
What you need in order to refinance your car loan
If you believe that you can save significantly on your existing car loan CarClarity can help you.In order to qualify to car refinancing you will need to fulfill the below criteria:
1. Have a good track record of paying off your existing loan in full and on time.
2. Be at least 6 months into your current loan
4. Have a good credit score
5. You will need to be an Australian Citizen or Permanent Resident
Car loan refinancing is a great option for car owners who would want to get better deals that meet their personal interests. Lenders offering refinancing car loans seek to meet the individual needs of customers. If you are not comfortable with your existing car loan contract, it's wise if you considered the refinancing option. Contact us today and get a better loan will give you the peace of mind you need.
David Fahim is CarClarity's COO, joining forces with two founding team members that share the same passion of helping customers get the right car loan.
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