With the way the market is changing, perhaps you’ve been wondering how you can do something about those loan repayments! Changes in the financial market can actually play to your advantage if you have taken a loan out before to finance your car.
Refinancing means to rework your loan so that the current interest rates apply and your repayments become (hopefully) a lot more affordable! It may seem a little complicated, but since The Smarter Finance Company is the expert in car finance deals, let us tell you what you should look out if you’re thinking about refinancing…
1) Changes in the Interest Rate
When the market decides to move, it’s good to keep eyes out in case it moves in your favour! When you first bought your car and had car finance plans put in, everything was based at the interest rates at that time. Whether the rates were high or low at that point of time affects whether a change in the market conditions will be any influence on your decision to refinance your car.
In particular, you should be looking out for a drop in the interest rate which will allow you to refinance your car loans at a lower rate. Whether you chose a fixed or floating interest rate to begin with, even a change in one or 2 percentage points can make a big difference to your monthly payment amount!
2) Changes in your financial situation
Perhaps it has been a few years since you first bought your vehicle. Now you have moved to a bigger apartment and your monthly commitments have increased; perhaps you have changed jobs and might not be able to afford a bigger monthly payment. Re-examining your car finance plan could be a solution to a tighter budget when these life events occur because refinancing can really do wonders in decreasing your monthly payment amounts.
Again, Car finance rates should most definitely be examined before you make your final decision to refinance, but in essence, the objective of refinancing your new or used car loan, is to take advantage of the interest rate to pay less!
3) Changes in your Credit Rating
And unlike the above scenario, perhaps you’ve gotten to a better situation, with a promotion or better paying job. Or perhaps you are just more stable and savvy at handling your finances. All these can cause your credit score to improve and a better credit score can most definitely make a difference on the car finance scheme that you pick up! You might be able to qualify for a better financing rate now, so why not take a look at refinancing so that you can enjoy a lower repayment amount?
While refinancing your car loan might be a wonderful idea to help you save hundreds of dollars or even thousands a year if done right, remember that you it may not always be the right thing to do. Double check if there are any lock-in periods, fees or clauses that might affect you changing your car loan plans and better yet if you can consult a professional who will ensure that you are not caught in a sticky situation.
The Smarter Finance Company has helped many customers to safely and quickly put through their refinancing applications and we would love to offer you the same advice and help! Contact us today to find out more.