What is refinancing a car loan?
Refinancing a car loan means to replace your current car finance agreement with one of different (most likely, better) terms. The new loan, often with a new lender, could improve your finance plan terms by reducing monthly car repayments, lowering interest rate, and allowing you to remove or add someone to/from your policy and increase or decrease the loan term length.
How to refinance a car loan?
It’s easier to refinance a car loan than it was to first obtain your current car finance deal. All you have to do is fill out our quick and easy application form.
From there a member of our friendly team will give you a quick call to confirm your details. Now, unlike on your initial plan, you don’t need to come in, therefore this vastly speeds up you application process and you could get your new refinance deal within hours
When to refinance a car finance plan?
It can be difficult to decide if you should transfer your car loan and refinance. The first step to doing this is finding out when you can refinance your car.
You don’t have to wait, if you wanted you could refinance immediately. However, you increase your chances of getting a better refinance deal if you build up your credit score or wait for interest rates to drop.
Does refinancing hurt your credit rating?
When you apply to refinance your auto loan, it will trigger a lender to perform a hard inquiry on your credit report. When this is done it generally causes your credit score to drop by a few points, the effect of this will lessen after 2-3 months, but will remain on your credit report for two years. Multiple hard inquiries suggest to lenders that you are desperate for credit and there for have a significantly negative effect on your credit report rating. With this in mind we would recommend avoid applying for multiple loans at one time.
However, once your refinance application has been approved, your current lender will close the old loan and the new loan will then appear on your credit rating, effectively evening out your credit line.
Apart from multiple applications, as long as you make all your monthly payments on time, applying to refinance won’t affect your credit rating.
You can find out what is counted on your credit file here.
How many times can you refinance a car?
You can refinance your car loan as many times as a lender will approve your application. However, as stated above you want to avoid too many hard inquiries.
Refinance with bad credit
You may think having a bad credit rating, or even no credit score may harm your chances of getting an approval on a refinance plan. With Refused Car Finance that is not the case, we specialise in approving people who have been refused elsewhere. This is the same when it comes to refinancing a car with bad credit. As bad credit car finance specialists, your chances of being approved are greatly increased when applying for a refinance car loan through us.
If you have bad credit and are looking for some advice on improving your credit rating, check out our ‘Tips on Rebuilding Your Credit Score’ blog post.
98% of applications in 2019 were approved.
Benefits of refinancing a car loan
Reduce monthly payments
Reduce interest rates
Shorten / lengthen loan term
Remove or add someone to your policy
Improve relations with lender
There are no fees to refinance your car loan here at Refused Car Finance. However, some lenders do have fees built into their own agreements.