Car Loan Refinance

Yes, there are many reasons why you might decide to refinance a loan.

Refinancing a loan means that you replace an existing loan with a new agreement so that the old loan is paid out, and you start a new loan contract, possibly with a lower interest rate, lower repayment and/or a new term.

Refinancing a loan can help you get a better rate and lower repayment if your circumstances have changed, and your credit score has significantly improved, or available interest rates have dropped. It is important to note that refinancing won’t be available if you’re behind on your repayments, owe more than your vehicle is worth, or if your vehicle is too old.

There are many scenarios where it may be of benefit to refinance an existing loan.

Your credit score has improved.
Since you signed up for your car loan, your credit score improved, so you may qualify for a lower interest rate, meaning you can pay less every month and save money.

The interest rate dropped.
If the market offers lower interest rates than when you signed for your original loan, you may be able to save money by refinancing.

You did not compare different car loan options.
When you took out your current loan, you did not use a broker to search the market to compare several lenders offers that were available to you. Perhaps you took your loan out with your bank or car dealer that have only their own products to offer, whereas a broker such as CarMoney has access to over 30 lenders, many of whom could have more competitive offers for you.

Your current repayments prevent you from saving or from making other purchases.
Refinancing a loan can ease financial stress with lower repayments. However, it is important to look at the structure of your refinance proposal to ensure that it meets your short-term and long-term financial goals.