Do you have an existing personal or car loan? When it is time to pay the current loan, you may require extra help. That’s where refinancing your loan may be useful for you.
We can assist you with your refinancing needs – whether you have a loan with another lender or us.
But before you decide to refinance your loan, we encourage you to take time to research and understand what refinancing is about. It has several benefits, but only if you know how to use it as a tool to achieve your financial goals.
When Do You Need
If you are stuck with a high-interest loan, it’s not true that there is no way out. A little bit of guidance and perseverance can help you surpass the hurdle. With the right refinancing offer, you can get a new loan with a lower rate to pay off the first loan. In doing so, you can reduce and complete the monthly repayments and then focus on repaying the second loan.
Refinancing can be valuable for those who:
- Have a good credit score with no late payments
- May need to consolidate their multiple loans or debts, such as personal and auto loans, along with two or more credit card debts
- Require more funds to pay off the current loan or for an unavoidable expense
- Want to change an element in their loans, such as the repayment amount and dates
You could have other reasons for considering refinancing, such as being unhappy with your current lender.
You have probably heard about the horror tales about refinancing. But there are also many others with lots of success stories. It’s easy to get confused and be hesitant. As a trusted company in the finance industry, Loans Unlimited can tell you there is always a risk involved, whether you’re a borrower or a lender. However, the key is to make the loan work for you by becoming wise financially as you possibly can. If you can save one or two per cent in interest rates, refinancing certainly makes sense.
Refinancing your existing loan with us can give the following benefits:
A Lower Interest Rate
Yes! Believe it or not, refinancing can help reduce your interest payments. It’s actually the biggest reason why Australians refinance their loan. Lower interest means reduced monthly payments, allowing you to save some cash, especially for rainy days.
Extended Loan Duration
We’ve heard and seen complaints from customers who feel like they have a shorter time to repay their loan. That’s why they turn to refinance. You can have the same benefit. A longer loan term means reduced regular payments. How so? The principal loan or the exact amount of money you borrowed (excluding the interest) is paid by dividing the principal by the number of months or loan term.
We’ll be your new lender, which means you will have no difficulty in dealing with us. We are always ready to help and answer your questions.
As mentioned, refinancing can also have some drawbacks. For example, you will probably face entry and exit fees and pay more interest in the long run.
What We Can
Most of our customers find refinancing helpful for their situation. But given that everyone’s circumstances are unique, you may want to determine first if this option is for you. One way to figure it out is based on the value of the car you’re paying for. Remember that vehicles depreciate or lose their value as time passes. If you owe more money than the total car’s value, lenders will view you as a high-risk customer.
Before you refinance, always check your chances of getting approved for a refinance. Also, ensure that the value of the car is more than what you owe.
Compared to home loans, car loans are usually shorter in duration, typically running anywhere from one to seven years. You may refinance your loan depending on the length of your current loan. Assess the situation and determine if the costs are worth the effort of the application.
If your car loan is about to end in a year, refinancing is not a good idea. You could easily end up paying more fees. On the other hand, if you still have five years left for your loan, you may be able to get a better rate through refinancing with us.
Just like with your current loan, your financial circumstances and other information will be evaluated. If you are currently unemployed or have been transferred to a different position with lower pay, you would either have to pay a higher interest rate or borrow a smaller amount.
Your income, children or dependents, debts, and existing car loan will help the lender determine your rate and borrowing power. Please contact us if you require a more customised answer. We will ask for specific details, including your salary and other financials.
The Reserve Bank has required lenders to adjust their rates. It’s the best time for customers to take advantage of the different deals available. Shop and compare before you send an application. Get a quote, if possible, so you know which one meets your needs and budget. Refinancing can lead you to better products with lower rates, allowing you to save on your loan.
Please make sure you get in touch with us so that we can help you find the most suitable loan for your financial requirements. The rate you will receive will depend on your income and other personal information, as well as the type of loan, your current interest, and features you’re searching for.
In general, there will be fees that you need to pay when you switch from one loan to another. You will most likely be charged for the early repayment fee. Consider that particular cost before proceeding.
Aside from early repayment, you may also have to pay certain penalty fees. That is why it’s essential to read the terms and conditions of your existing loan. That way, you know whether it is worth switching or not. You can also ask your current lender about the fees.
It’s common knowledge that having good credit can help you gain access to lower rates and better offers. If you have bad credit and wish to change to a better loan product through refinancing, you may be allowed to do so. It often depends on the lender, the loan product itself, and your credit score, of course.
If your credit score is bad but still acceptable, you can refinance your loan. However, a less than desirable score will cause the lender to see you as an extremely high-risk customer. You may still be approved, but the interest and fees may not be worth the refinance.
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