Refinance Your Car Loan at Historically Low Interest Rates

When you decide to refinance your existing car loan, it is imperative that you weigh up all the pro’s and con’s and determine if it puts you in a better financial position. It pays to consider all the facts and the reasons why you may want to consider your refinance options.

Reasons to refinance

It is important for any car loan broker to understand the reason why you may want to refinance your loan. Refinancing your car loan may not always be the most cost effective option. You should always speak with an experienced finance consultant to explore all of your options before possibly compounding the issues you may have with your current financial situation.

3 common reasons for refinancing your car loan

  1. “Reduce your current interest rate” – Did you rush into a high interest car loan offered by the car dealer and didn’t shop around prior? The trap to lookout for here is that with most fixed rate loans, the early termination fees charged could be significant and may erode any savings that a lower interest rate may provide. Getting all the facts and taking into consideration all the costs involved with refinancing, you can ensure any savings are enough to put you in front of your current situation.
  2. “Change in working or living arrangements” – Has your personal situation changed? Have you recently changed jobs and are earning less money than you previously were and finding it hard to meet your current commitment? Have you recently become self employed to ease the burden of starting a business? Have you gone from a 2 income to a 1 income family and you need to reduce the car loan repayments? If you have answered yes to any of these questions, then refinancing your car could be beneficial to you.
  3. “The balloon/residual payment is due” – Did you take out a car loan and structured the repayments to include a balloon payment at the end? Is it now due for payment and you want to keep the car but need to refinance it? It is possible to refinance the balloon over an additional term. But with all decisions there are some factors to consider before proceeding. For instance, the interest rate may not be as attractive as when you took the loan originally. Rates may have increased over time or the lender may offer a higher rate because the vehicle is older. All these factors need to be considered to determine whether it is beneficial to your situation to refinance.

As can be seen, it is important to consider your needs prior to deciding if refinancing your car loan is right for you. If you need help deciding and would like to run through the numbers to see if it will suit you and your requirements, give the team at 360 Finance a call or apply online now.