Once you have made the decision to buy a used car, you should start by getting a PPSR check done of the car from REVS Check. The PPSR check can be done by providing the VIN number or registration number of the car and paying a nominal fee. You can consider getting your car loan refinanced for getting more favorable repayment terms on it. This will help you save money on interest repayment. The current article provides insights into refinancing and its benefits for you.
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What is Car Loan Refinancing?
Car loan refinancing means moving your existing car loan from your original lender to a new lender. It can help you to get better repayment terms with lower interest rates. You can opt for refinancing if your credit score has improved after taking the original loan, which will help you save on interest repayment.
The key benefits of refinancing are as follows:
Lower Interest Rate
One of the most significant benefits of refinancing your existing car loan is that you can get lower interest rates from another lender. You may have a poor credit score which would have prompted the original lender to charge you a higher interest rate. If your credit score has improved after a couple of years, it is worth exploring the possibility of refinancing your car loan from other lenders who may offer you lower interest rates.
Easier Payment Terms
You may find it difficult to service your car credit due to sudden changes in your life. You may be faced with new situations like medical emergencies, having a baby, unforeseen expenses, etc. which may affect your ability to pay your EMIs. In such situations, it is recommended to explore refinancing opportunities to save money. You may be able to extend the duration of the loan which can lower your EMIs. The savings on the interest repayment can be used to meet the other expenses. However, you must also remember that extending the tenure will mean that you will be paying more interest compared to the original tenure.
Improved Credit Score
As discussed above, refinancing can reduce your EMIs and ensure that you pay your monthly installments without default. This will also protect your credit score from taking a hit. If you are able to refinance the loan on more favorable terms, your credit report will reflect the fact that you have repaid each installment on time which will boost your credit score. This will also make it easier for you to get credit on competitive interest rates in the future.
Getting a More Responsive Lender
Refinancing allows you the flexibility to change your existing lender. If you find that the existing lender is unresponsive to your needs and does not provide you priority treatment, changing to a new lender can be a better option. You can get your existing car loan moved to a more responsive and considerate lender who pays attention to your needs and treats you on priority.