Vehicle Refinancing
Refinancing can help you lock in a lower interest rate or adjust the length of the loan.
Car Refinancing and benefits
Car refinancing is a process that allows you to apply for a new car loan to replace your existing loan. The main purpose of refinancing is to change your loan terms.
For example, refinancing can help you lock in a lower interest rate or adjust the length of the loan if you need more time to pay it off. When you refinance a loan, the new lender pays off the original lender and settles the outstanding debt. Then, you start making payments to the new lender, based on the new terms of the loan.
Benefits of Refinancing a Car Loan
Refinancing a car loan has several advantages, especially if it can reduce monthly outgoings. Here are some examples of refinancing a car loan.
Pay Less in Interest
Another benefit of refinancing an auto loan is the ability to secure a lower interest rate. When you pay less money in interest, you pay less to borrow the money. If interest rates were high when you took out the loan, or if you've improved your credit score dramatically, you might be able to get a loan with a much lower interest rate if you refinance.
Lowers Your Monthly Payment
The main benefit of refinancing a car loan is a lower monthly payment. If you qualify for a better interest rate, or you wish to extend the loan period, refinancing is a great way to secure a more affordable monthly payment.
For example, imagine your current auto loan of £50,000 has a 11.9% APR interest rate over 48 months, with a monthly payment of around £915.00. If you were to refinance the loan to a 8.9% APR interest rate, your monthly payment would drop to around £795.00. Paying an additional £5,000 toward the loan would lower the payment even further to £670.00 per month. Adjusting several factors of the loan can make a big difference in the monthly cost. (subject to T&C’s and loan rates available at time of print)