Refinance Your Car Loan & Unlock a Better Rate Today
Car refinancing replaces your existing car loan with a new one, usually with different terms that are better suited to your circumstances. For many WA buyers, it can be a strategic move that decreases expenses and opens up new room in the household budget.
At Loans Unlimited, our crew have helped countless West Aussies secure reduced monthly repayments with lower interest rates or longer loan durations. If you’ve seen improvements in your financial standing or want to take advantage of shifting market conditions, get in touch with our office and see how refinancing could work for you.
The 4 Key Benefits of Refinancing a Car Loan
1: Lower Interest Rates
Lower interest rates are a primary reason why West Aussies reassess their car finance. If rates have dropped since your current agreement began, refinancing could significantly reduce the amount of interest you pay over the whole term. Improved credit and strong payment history can also lead to lower rates on a new loan.
2: Reduced Monthly Payments
Lower interest = lower monthly repayments. Refinancing can put a bit more wiggle room into your budget, which you can then redirect toward savings or other expenses. If you’re experiencing financial strain or are planning toward a new financial goal, this can be particularly beneficial.
3: Change in Loan Duration
Some borrowers simply want to change the term length of their loan – another way of lowering monthly repayments. Conversely, is you want to pay of your debt quick and are comfortable with a higher monthly repayment, you can shorten the term.
4: Cash-Out Refinance Options
In some cases, lenders offer cash out options where you refinance for more than the amount you owe on the car. You receive the difference in cash, which can be used for other significant expenses or that long awaited holiday! Before you apply, speak with our crew and be sure you understand the implications of increasing your loan amount and that it aligns with your financial strategy.
When Should You Consider Refinancing?
Different people will have different reasons for adjusting their car finance. Here are some common triggers for Australian buyers:
1: Decrease in Interest Rates
If there has been a decrease in interest rates since the start of the original finance, buyers often consider applying for a new arrangement. Lower market rates tend to transfer into lower interest rates, assuming your credit standing has remained stable.
2: Improvement in Credit
Refinancing offers many benefits to buyers whose credit rating has improved since signing their first agreement. Lenders’ best rates are reserved for the strongest borrowers and with diligent financial management, you could benefit from those terms.
3: Changes in Financial Situation
Some buyers receive a promotion or acquire a more stable income, making refinancing a great option. These changes reduce lenders’ perceived risk and could qualify you for better terms
4: Unfavorable Existing Loan Conditions
Many finance contracts come with high interest rates, less than ideal durations and uncooperative lenders. Refinancing can adjust these terms to align with your financial goals and what you expect from a lender and broker.
How Our Crew Reassess Your Car Financing
At Loans Unlimited, we’ve helped countless West Aussies secure a new car loan. Our crew have developed this streamlined process to make it as smooth and stress free as possible:
1: Assess Your Current Loan
We’ll review your existing loan to understand the interest rate, balance and penalties and why they aren’t working for you. You’ll receive a thorough rundown of any potential savings you could make form refinancing.
2: Check Your Credit Score
We’ll help you obtain a report from a trusted agency and get to work constructing your application
3: Shop Around for the Best Rates
Loans Unlimited doesn’t settle on the first offer. With 40+ partnered lenders, we’ll compare all of your options to find the best rates and terms. And if you’d like to negotiate even further, we’ve got you covered.
4: Apply for the Refinance
Once you’re matched with a lender, you’ll need to provide any remaining documentation regarding income, employment or the existing finance. Our crew will write up the contracts, get them signed by all parties and have you on your way with a freshly refinanced vehicle!
Get in Touch with Loans Unlimited Today
f you are reevaluating your car financing and want to learn more about low interest rate loan options, the Loans Unlimited crew is here to help. Get in touch today and see how we can take the gravity out of your finance.
FAQS
What does it mean to refinance?
This involves taking out a new loan to pay off an existing one. The new loan often has different terms, such as a lower interest rate, different duration or sometimes a different structure entirely. This holds a number of potential benefits for you as a borrower.
How can refinancing a car loan save me money?
It sure can! Reevaluating your car financing primarily saves money through lower interest rates, decreasing the amount you pay across the life of the loan. Monthly repayments can also decrease with a longer term, but this could increase the total interest paid.
Who should consider refinancing?
Consider a new loan if:
Interest rates have dropped since you took out your original loan
Your credit score has improved, potentially qualifying you for better rates
You need to lower your monthly payments due to changes in your financial situation
You’re not satisfied with your current terms or services
It is also possible for a business to refinance a commercial car loan.
Are there any costs associated with refinancing?
Changing your financing can involve some costs. You’ll have to budget for application fees, origination fees and potential prepayment penalties on your original loan. Ask our crew for assistance in calculating the total costs and ensuring refinance is the right move for the long term.
How does my credit score refinancing?
Your credit score is important in determining what lenders can offer. A higher score will mean lower interest rates and make refinancing much more attractive.
How long does it take?
There’s no general answer for how long refinancing will take. It depends on the lender and your preparedness with the necessary documentation. For many, the process is completed within a few weeks.
What documents do I need?
Typically, you’ll need to provide:
Proof of income
Proof of residence
Identification
Details of your current loan
Information about the vehicle
If you are unsure if you have or can access these documents, take a look at our low doc car loans.
What happens to my old car loan?
Your new lender will pay off your existing loan to close that account. No work on your end!
By understanding these key aspects of car loan refinancing, borrowers can make informed decisions about whether refinancing is the right financial step for them.
Can I refinance my car loan?
Yes, most car owners can refinance their car loans if they meet the lender’s qualifications. Key factors that affect your ability to refinance include the remaining balance of your existing loan, the age and condition of your car, and your credit score. Lenders typically require that the car be relatively new and not too depreciated in value, and that the borrower has a history of on-time payments. Before deciding to refinance, ensure that the remaining balance of your loan is more than the lender’s minimum loan amount, and check if your current loan has any prepayment penalties that might affect your decision.
Is refinancing a loan good or bad?
Refinancing can be either good or bad, depending on your individual financial circumstances and the terms of the new loan. It is generally considered good if it helps you reduce your interest rate, lower your monthly payments, or shorten your loan term, all of which can lead to savings or a quicker payoff. However, refinancing can be disadvantageous if it extends your loan term significantly, leading to more interest paid over time, or if the costs associated with refinancing (such as fees and penalties) outweigh the benefits. It’s important to carefully analyze the terms of the new loan and consider your financial goals when deciding whether refinancing is the right choice for you.
What bank is best to refinance a car with?
The best bank to refinance a car with depends on several factors, including the bank’s interest rates, fees, customer service, and the specific terms it can offer based on your credit profile. Major banks, credit unions, and online lenders all offer car loan refinancing, and each can provide competitive rates and terms. Some well-regarded options include:
Credit Unions: Often provide lower rates and more personalized service than larger banks, but you’ll typically need to be a member to apply.
Major Banks: Such as Bank of America, Wells Fargo, and Chase, are widely used because of their reliability and range of financial products, though their rates may not always be the most competitive.
Online Lenders: Such as LightStream, LendingTree, and Credit Karma, offer convenient online applications and can often provide competitive rates, especially for borrowers with good credit.
To find the best bank for refinancing your car loan, it’s advisable to shop around and compare offers from multiple lenders. Check their rates, fees, and read reviews to ensure they provide good customer service. Also, consider using rate comparison tools available online to get a broad view of what different lenders might offer you based on your credit score and loan needs.