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Car Finance Refinance and Refinancing

How To Refinance A Car Loan?

Learn how to refinance a car loan
Learn how to refinance a car loan and find out how you could benefit from reduced rates, improved loan terms and easier repayment structures.

Buying a car is an exciting milestone that gives you that freedom you have always longed for. You can say goodbye to bus and train timetables and take off for weekend getaways with ease. Getting to and from work is now a breeze, and you can get around as you choose.

There are so many benefits that come with a car. But do you have the best loan for you? Refinancing your car loan can land you a better deal and ensure you pay back less over time. Here’s how to refinance a car loan.

How To Refinance A Car Loan?

Wondering how to refinance a car loan? The process is quite easy, but you do have to do your research to make sure you are getting the best deal. Refinancing your car loan means replacing the existing loan with a new one under new terms.

Before looking at how to refinance a car loan, let’s take a look at the benefits it can offer and why you might consider it.

refinance car

Why Refinance A Car Loan?

There are many reasons you might be considering refinancing your car loan. If you are in a position of good credit and have been making your repayments on time each month, then refinancing is a great opportunity for you to secure a lower interest rate for your loan. This can help you save money and also reduce the monthly repayments.

Here are some of the benefits that come with refinancing:

  • You can find a better interest rate. This will save you over the course of your loan and you will end up paying back less money overall.
  • You have the opportunity to extend the length of your loan to make it easier for you to pay back.
  • You also have the opportunity to remove your guarantor by refinancing the loan.
  • You can change the type of loan you took out, ie from fixed to variable interest or from secured to unsecured.
refinance car loan

What To Consider

Before you take decide to refinance your car, there are a few things you should consider:

  1. The value of your car: the value of your car is different to how much you paid for it in the first place. Cars aren’t considered a great investment and they usually devalue the minute you drive out with them. Owing more money than the car is currently worth makes you a high risk to a lender and can be more difficult to find a new lender who will refinance your loan. If you default on your loan, the lender can seize your vehicle as payment, but if it is worth less that your loan, then they won’t get the full amount owed.
  2. How long you have left on your loan: car loans are significantly shorter than mortgages, so it is worth looking at how long is left on your loan to consider whether it is worth it. If you have less than a year left, then the cost in fees to change lenders could end up more than you save on a new loan.
  3. Work out the costs: you also need to work out how much it will cost you in fees etc, compared to how much you save on interest to see if it is worth your while. This will vary from lender to lender.
car loan refinance

Types Of Refinance

When it comes to how to refinance a car loan, there are a few options available to you.

Car loan: you can take out a new car loan with a new lender. This new car loan will take over your old one and offers you the perks of a lower interest rate.

Personal loans: you can take out a personal loan with a new lender to cover the cost of a car loan. You can use the money from the personal loan to pay back you car loan provider and then pay off the personal loan instead.

How does it work? Once you find a new provider, you can choose the type of refinance you are interested in. The money you borrow from the new lender is then used to pay off the balance on your previous car loan. As a result, you enter into a new contract with the new lender.

How To Refinance A Car Loan?

Now that you know the benefits that come with it, you might be wondering exactly how to refinance a car loan? If you are wondering if you qualify then speak to the experts at the Australian Lending Centre.

We offer fast and reliable vehicle refinancing options to help you save money and get a better deal.

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Personal Loans Car Finance

How to Get A Classic Car Loan on a Budget

classic car loan

Collecting classic cars is one of the costliest hobbies around and it is a little trick to get a classical car loan. The price tag on such a baby is sure to cause a panic attack in many people. People found ways of getting a classic car loan despite having a normal budget that in certain circumstances would destroy their dreams of being at the wheel of a vintage beast. If you’re aiming at getting a classic loan but your budget is nothing out of the ordinary, you might find this guide very handy. Let’s take a look at the steps you have to take in order to get classic car loans on a tight budget.

Classic car loan Guidelines 

Consider private lenders 

Credit unions and banks are not a good source of car loans, especially when you juggle with a couple of loans already. And even if they offer you the car loan you require, it will probably have a huge interest rate and it will be secured on your house. Private lenders, on the other hand, have a wide variety of car loans that come with affordable interest rates. What’s more, many of them are willing to tailor repayment plans for their clients.

You can find a private lender pretty easily. Just surf the Internet for a while and you’ll definitely find one. Stay away from lenders who ask for deposits or any other sort of down payment.

Hire a broker for your classic car loan

One that specialises in car financing, to be more precise; if you can’t seem to find a good deal, no matter how hard you try, such a broker can do some research and get back to you with one.

Moreover, a car broker can easily save you some funding, as well as the hassle of doing all the research on your own. Brokers collaborate with a lot of lenders. Sometimes you don’t even have to pay the broker because he works on a commission. In other words, if he gets you the dream-deal, he’ll get a certain sum of money from the lender he hooked you up with. This is how you save money by hiring a car financing broker.

Leasing

Tons of classic car enthusiasts choose to lease vehicles and then purchase them. This works perfectly for those people who can’t afford to buy a classic car with a down payment or can’t find a lender that’s willing to hand them some dough. After leasing, you can purchase that vehicle outright and you’ll know for sure how efficient the car is and whether or not it’s as worth it as you thought it would be initially. This is the best alternative to car loans you have (and the safest, to be completely honest with you).

A HELOC 

A Home Equity Line of Credit could actually provide you with enough funds to purchase the classic car you’ve been dreaming about for so long. Of course, you have to own quite a large, modern house that has a lot of equity in it. As you might know, a HELOC is a loan that’s secured on your house, which serves as collateral. If you fail to repay the loan, the lender can place a lien on it and sell it. The HELOC, therefore, should be your last resort. The Home Equity Line of Credit usually serves other purposes, but it’s totally possible to get a car with the money that comes from it.

Secured or unsecured

You’ll have to determine if you want an unsecured loan or a secured one. Under a secured one, you’ll get more money and lower interest rates. Under unsecured car loans, you’ll get a more limited amount of money and higher interest rates. But then again, an unsecured loan doesn’t pose a threat to your assets. If you fail to repay it, the worst thing the lender can do is to sue you. Keep in mind that he can get the right to place a lien on your assets even in this circumstance.

Extra caution is therefore advised. You certainly don’t want to be living in a Cadillac, as cosy as it might be. Think twice or even thrice about this issue and make a decision you won’t live to regret after a while.

Concluding Remarks 

Classic car loans are a great way of finding the car you want to get but can’t afford to purchase outright. Australian Lending Centre can provide some really valuable advice when it comes to taking advantageous car loans, as well as the financial products themselves. Make an enquiry on the website and you’ll most definitely find a car loan that suits all your needs and comes with an affordable interest rate and a good repayment plan. We hope you’ll get to be at the wheel of that shiny, vintage car you’ve been dreaming about for years on end.

Categories
Mortgage Financial Fitness Financial Planning Home Loans

Will My Car Loan Affect My Mortgage Application?

car loan mortgage application||car loans||Car Loans||car loans

A car loan can help you a lot if you plan to get your next car faster. However, a car loan can affect your mortgage application or other types of significant loans. If you are planning to buy an expensive car, this means that you will require a large loan. That car loan can impair your future borrowing power. But this doesn’t mean that you need to choose just one of these two.

Let’s see how a car loan can influence mortgage applications and how we can deal with such a situation.

First Things First

When you apply for a home loan, you will need to provide information regarding your financial status. This means that you will have to give documents regarding your monthly income, assets you own and other ongoing payments. This is how a lender will determine whether you can pay back the loan or not. Every lender wants to avoid doing business with people who might not be able to keep their word because of their financial problems. They want profit, not excuses.

If it were a personal loan, your mortgage application would be fine. But since we are talking about an expensive car loan, your mortgage application might get rejected due to your other massive loan. Either that or come with a lot of restrictions.

mortgage-application

Will My Car Loan Affect My Mortgage Application?

A car loan will have a high impact on your finances. Given all the taxes you need to pay, a car loan can take most of your monthly income. Still, aiming for a cheaper car might be of some help. Since cars tend to lose their value quite quickly, getting a very expensive one may not be a good idea, especially if you intend to apply for a mortgage.

Mortgage applications will act the same so that you will be left with little to no money. This is why a lender will probably have to refuse your mortgage application.

A lender wants to know that you will pay your mortgage and you won’t default on it. He will analyse your assets and other methods of income. If he sees that you have the financial power to afford a car loan and a mortgage at the same time, he might give you the green light. If not, it might be better for you if you only had one.

Defaulting on a mortgage is not a good sign for your lender and your finances. Car loans and home loans can quickly turn into uncontrollable debts, and you might end up losing everything. So don’t think of the lender as the bad guy, but be objective and calculate what you can and can’t afford, because in the end, if you are dishonest, you will suffer the most. Because banks and lenders make sure they never lose.

eligible-for-loan

Can I Still Be Eligible for a Mortgage Application?

Yes, you can. Your car loan will affect how much you can borrow, but if you don’t want an expensive house, that a limited amount of money can be just enough. If you can’t get the sum you need, you can search for an affordable home. When it comes to loans and money, flexibility is a must.

If you want to increase your chances of getting your mortgage application approved, then it’s time to clean a little bit of your credit file. Pay your debts and try to repair your bad credit. Also, consider debt consolidation as a possibility. Lenders will check your credit to find out who they are dealing with and also what other assets you own, just in case they might have to make up for that loan with something else rather than your money.

Having a savings account is a great idea. It makes you more trustworthy and responsible in the eyes of your lender. Let’s not forget that having some savings might help you quite a lot to reduce the amount you would apply for.

Also, try to talk to your lender. The more information he gets regarding your situation and income, the bigger the chance of getting your request approved. Don’t forget to tell him your exact plans.

suitable-car-loan

Final Thoughts

So, the short answer is that a car loan can influence mortgage applications and under certain circumstances, it can get your requests denied. But do not let yourself discouraged. Evaluate your possibilities, cut down on the unnecessary expenses and, if you can, try to pay ongoing debts before applying for a mortgage.

You can talk about these details with Australian Lending Centre. Our friendly consultants will tell you about your chances of receiving a loan and, if you fit our criteria, you may even get a good mortgage option. Advice never harmed anyone so you should not miss the chance of clarifying your options face to face with an expert.