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Car Loan Refinance – Is It a Smart Idea? All You Need To Know
March 4, 2020●
9 minute read●
Refinancing your car loan
If you’ve been paying a car loan for a while, chances are high that you could get a loan under better conditions these days! It’s even possible that your credit rating has improved and you would get a much better interest rate than when you applied. We’ve got you covered! Learn all you need to know about car loan refinance and make an informed decision for your financial future.
What is car loan refinance?
Loan conditions change over time and sometimes, your financial situation does, too. When refinancing a car loan, you take on a new loan with better conditions to cover the leftover repayments of your initial loan. You can pay off the new loan with better conditions instead. What is the right timing for a car loan refinance? That depends on your circumstances. You can refinance a car loan at any time, even before you made your first payment. However, that is probably not a smart move. Your credit rating may drop temporarily when taking on a loan and then increases again with successful repayments. Better check your rating first to make sure you will get a good deal. It may make sense to wait for a few months before you apply for your car loan refinance.
Reasons to refinance your car loan
There are many possible reasons to get a car loan refinance. However, the most important one is probably to save you money. If you didn’t get the interest rate you think you deserve or the loan term you were looking for, refinancing may be a good idea.
Better interest options
Available interest rates for car loans change all the time. It is possible that you may find a loan a few months later that has better initial conditions. If you have been repaying your loan for a while, your credit rating may have improved over time and you are eligible for a better interest rate.
Your financial situation has improved
You may have just landed a new job or inherited some money. If that’s the case, congratulations! In any case, it may be worth considering refinancing your car loan. If you got into a better spot and can afford to repay your loan in a shorter amount of time you will save money on interest long term.
Better loan terms
It’s possible that you won’t be able to get the loan terms you wanted when you applied for your loan. However, a few months later other options may be available to you.
Your credit rating has improved
Did you know, paying off a loan may increase your credit rating? However, it won’t show in your credit rating immediately and it makes sense to check it frequently until your rating is at a point to enable you a better deal. Multiple other factors may play into this: Paying off old debt, paying your bills on time, and maintaining a healthy balance on your credit card can improve your credit rating over time.
How does car refinance work?
It’s pretty easy: You simply apply for a new loan to cover the costs that are left on your old loan. Once your first loan is repaid, you will only make payments towards the loan amount with better terms or interest.
How to apply for a car loan refinance?
It’s the same procedure as for any other of our loans: You can apply through our online application, it won’t take you long! Most people submit their application within only a few minutes. If you have all the required documents handy, you can race through this section!
Step 1: Fill in your application
We won’t take up much of your time. It takes a few minutes to fill in your personal data and to tick the required boxes. You will be even quicker if you keep your personal details and online banking login handy.
Step 2: Wait for your assessment
That’s when our team starts to work hard. We want to make sure that we offer you the best option possible for your financial situation. While we also perform a credit check, we mainly look at your spending habits and your current relationship with money. We will access a read-only copy of your bank statements to make sure we get all the information needed. Once the assessment is done, we will get back to you with the outcome as soon as possible.
Step 3: Receive your funds
If you’re approved, congratulations! You are now part of the Jacaranda family. We will send you a loan contract that will state all fees and costs. Once that is signed, we will transfer your money to the nominated bank account as soon as possible. Some people may even receive their funds the same day they apply for it!
Can I refinance if I have bad credit?
Refinancing your car loan is only advisable if you have a good credit history. If your credit rating has dropped since you applied for your car loan, chances are high that you won’t get a better deal anyway. However, in some cases, you may not be looking for a better deal in that sense but rather lower your payment rate. We would recommend you talk to your current lender first to see if it’s possible with them. Otherwise, you may end up with a lower payment rate but a higher interest.
What car loans does Jacaranda offer?
If you’ve been searching Google for “car loan refinance”, you may have come to the right place. We offer car loans from $5,000 to $35,000. You can choose the repayment terms from 1 to 5 years. If you want to refinance your can loan, simply choose the amount that is left of your previous loan. It will cover your full payment and we may be able to offer you a better deal, depending on your credit score and your financial situation.
Who can get a car loan with Jacaranda?
While we encourage everyone to apply for a loan with us, you do have to tick a few boxes to be eligible for a car loan:
- Be at least 18 years old;
- Have a driver’s license;
- Use online banking with a history of at least 3 months of income;
- Provide an active email address and mobile number.
If this sounds like you what are you waiting for? You are more than welcome to apply for a loan with us – and your search for “car loan refinance” may finally have come to an end.
Why do I need to provide my online banking?
We want to make sure that we understand your financial situation properly. That’s why we have a look at it from all angles. We access a read-only copy of your bank statements through the latest in safe banking software. That’s why we need your banking details. But don’t worry. We take data security very seriously and no one will have access to your account at any time.
How do repayments work?
Most likely, our service is pretty similar to what you are used to from your previous lender. We believe in transparency and, therefore, will make sure that you know what you are signing up for. All costs and fees will be stated in your loan contract or can be viewed at our costs page. We will send you an offer including payment terms and your interest rate. Once you agree to that, we will set up an automatic payment plan that will automatically debit the repayment amount from your bank account or credit card. As long as there is enough money on the account to cover your payments, you can completely forget about it until it’s paid off. If you need to make any changes to your repayment plan, you can directly get in touch with our customer service team.
Calculate your repayments with a car loan calculator!
And what if I miss a payment?
Of course, no one is planning to miss a payment but it’s good to know what happens in case of a worst-case scenario. If you have a change in financial circumstances and you know you will miss the next payment, please let us know as early as possible. We may be able to find a solution that works for both sides. Communication is key and we hope you reach out if you need to. If you just let it pass, we may add a penalty fee on top of your next payment.
Can I talk to someone?
Of course! We are an online-based service but we are available to help during our business hours. If you get stuck during the online application or have additional questions regarding “car loan refinance” you can either give us a call or send us a message. You will find all the information on our contact page.
And of course, you can send us a message any day or night. Our telephone service is available to you during our business hours.
Our business hours are:
Monday to Thursday: 8 am – 6 pm
Friday: 8 am – 4 pm
Saturday: 8 am-12 pm
Why get a loan with Jacaranda?
You may have compared a few lenders already, so let us tell you why you want to be part of the Jacaranda family! We are different from other lenders because we want to make a difference. We believe that everyone should have a fair chance to get access to personal finance whenever they need it. That’s why we also offer loans for people on Centrelink, loans for pensioners, and loans for people with bad credit.
We strongly believe in responsible lending practices. Some lenders may give people an instant loan with no credit check. What sounds good may leave the borrow in a situation where they may not be able to repay their loan. We don’t do that. We won’t lend you money if we think you may struggle to repay!
We want you to have the best possible loan experience. That’s why we make sure you know about all costs and fees upfront. They are all stated on our costs page and in your loan contract, no bad surprises.
We are 100% online-based
You won’t have to queue for our applications at all. You can apply online at any time from anywhere in Australia. That’s why our application is super fast. Some people may receive their outcome within 60 minutes (if you apply during our business hours and we don’t need any extra documents).
Get refinancing for your car loan – you can apply any time
If you don’t have any additional questions, let’s get started! Even if you are unsure if you qualify, give it a shot! It won’t take much of your time and you will know if we can offer you a better deal in no time. Most people receive their outcome within 60 minutes if they apply during our business hours.
Learn more about car finance and getting a car on finance!