When next refinancing your car loan it’s important that you do so informed, as there is a lot of misinformation going around these days. By learning how to separate the facts from fiction, you will be better able to get the best rates when it comes to refinancing a car loan.
Getting the best deals in life often means doing your research and calling your finance provider to ask if you currently have the best deal available. This is the same when it comes to refinancing your car loan. Depending on your financial situation, refinancing could end up reducing your monthly repayments and leave you with more money in the bank each month.
The following are the top 5 facts you need to know when refinancing a car loan.
- Know Your Credit Score
Knowing your credit score will be a large factor when it comes to the refinancing rate which you are offered, along with the application fees and repayment interest rates. If your credit score returns a low to below average score, you could find yourself in a situation where you are paying a large rate, making it difficult for you to meet repayments and leaving yourself in a worse position.
The point of refinancing your car loan is to provide you with increased breathing room, the ability to better control your personal finances and to give you a better deal. By knowing exactly what your credit score is before you apply, you will be in a stronger position to know exactly what to expect.
- Do your homework
Ignorance and not doing your homework ensures that car loan providers assume you are not informed and that the best deals are not presented to you. When refinancing your car loan, it pays to have done your research before you fill in any application forms.
These days in Australia the best deals are received by shopping around and doing your research beforehand. With numerous different comparison websites online these days, there’s no excuse for not doing your homework.
- Refinance calculators
Before signing your car loan refinancing application, a smart idea is to find out whether refinancing will save you money in the long run. Using a refinance calculator enables you from the comfort of your home to estimate your savings and make the decision if refinancing is right for you or not. Comparisons ensure that you get all the facts and are quickly brought up to speed with current trends and the best deals available.
- Hidden Fees
When filling in your car loan refinancing application be sure to ask about any hidden fees. Contracts by law must include all applicable fees, with the onus on you to ensure that you properly understand your repayment obligations. Hidden fees can increase your monthly repayments so it’s important that you factor these in if they apply in your case. If hidden fees do apply, consider shopping around for a better deal as not all finance companies levy such fees.
- Pay off your loan faster
When you refinance a car loan the finance lender will often give you the opportunity to nominate whether to make repayments weekly, fortnightly or monthly. Similar to a home loan, the best option to choose is weekly repayments as this ensure the overall interest repaid will be lower and will result in you saving more over the long term. By being informed of all the above facts, you can ensure that you come away with a beneficial refinanced car loan.
