Have you taken out a car loan but are currently struggling to make ends meet or repay your monthly instalments? You may want to consider refinancing your car loan instead to lessen your financial burden.
A car loan refinancing scheme that is available in Singapore essentially allows car owners to pay off the balance of their existing car loan with a lower interest rate. It works by replacing your current car loan with a new one, typically with a different lender and your car will remain as your collateral.
A refinancing car loan is beneficial when interest rates have dropped since you first took out your existing car loan, you find that you did not get the best offer the other time, or you are having trouble paying your bills.
Here are the benefits of refinancing your car loan that will convince you to make the switch – read on to find out more.
- Lower interest rate
It is not surprising for interest rates to fluctuate so there is a possibility that they have fallen since you took out your car loan a few months ago or years back. Therefore, when you refinance your car loan with a lender offering a lower interest rate, your monthly repayment amount decreases in return and you will be able to free up cash to fulfil other financial obligations. Do not overlook slight differences in interest rates as even a small 2 or 3% can result in significant savings in the long run and throughout your entire loan tenure.
- Improve your cash flow
Some lenders may not offer a lower interest rate but allow a longer repayment period. This will ultimately result in a lower monthly repayment for you too which is why you should look at the fine print (even if the interest rate is not as attractive) and consider refinancing your car loan if your main concern is the amount of cash you have to fork out every month. With a lower monthly repayment plan, the cash that is freed up can be used to meet other financial obligations you may have.
Pay off your loan earlier
It is also worth noting that taking up a car loan refinancing scheme is not just for those who are struggling to make monthly payments. If you have had an increase in cash flow or income and can afford to pay off your loan sooner, then refinancing your car loan may help you reap even more benefits. You can choose to go for one with a shorter loan term and lower interest rate, helping you to save more eventually than if you were to stick with your existing car loan.
Lower monthly payments
Refinancing your car loan either gives you a lower interest rate or a longer repayment period and both allow you to make smaller monthly payments at the end of the day. This can be really helpful in times of need, especially when unforeseen circumstances happen, such as accidents resulting in hefty hospital bills or retrenchment that is accompanied by a sudden loss of income.
Refinance your car loan in Singapore today
It is important to take up a refinancing car loan only after you have weighed your options and when the time is right based on your financial situation.
It may be worth considering if the interest rate is lower or if your financial capabilities have improved.
Here at Swee Seng Credit, we offer competitive refinancing car loans that will help you to save more. With 100% no hidden or additional charges, we are the one-stop platform for all your car financing needs in Singapore.