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If you currently have a car loan for your Volkswagen and are looking to reduce your monthly payments, refinancing may be an option.
Refinancing involves taking out a new car loan to replace your current one. The idea is to lower your car payments, reduce what you owe overall, or extend your loan term to make your installment payments more manageable.
Keep in mind, refinancing only makes sense in certain situations, and you’ll need to qualify for a new loan to replace your old one. Read on to find out how to refinance your Volkswagen auto loan to save.
Yes, you can refinance your Volkswagen auto loan, as long as you can qualify. Generally speaking, you should refinance your car loan if you think you can secure a lower interest rate. For instance, if your credit score or income have improved, you may be eligible for a lower interest rate.
You typically have two options to refinance your Volkswagen car loan:
You can refinance your current car loan by taking out a new car loan to replace your existing loan. Just ensure that your new loan comes with better terms than your previous one. Once, you’re approved, you’d simply use the new loan to pay off the old loan. Do note, some lenders may charge a prepayment penalty fee, which can cut into your savings.
Rather than applying for a car loan refinance, you could apply for a personal loan for an amount that would completely cover your current outstanding car loan. If you can get approved for a personal loan at an interest rate that’s lower than the rate you’re currently paying on your existing Volkswagen car loan, you could save money in interest over the long run.
When you finance your car with Volkswagen and approach the end of your contract, you have two choices:
If you leased your Volkswagen, you have three options:
Volkswagen offers various options when it comes to how you pay for your vehicle. Here’s how each option breaks down in terms of cost, payments, and ownership:
There are a couple of ways to get in touch with Volkswagen Finance:
To contact the Privacy Officer, choose from one of the following:
Volkswagen Finance is available from 8 am to 9 pm EST, Monday to Friday.
Your Volkswagen car loan payments are determined not just by the price of the vehicle, but also by the interest rate you’re offered. The lower the rate, the more affordable your auto loan will be. Your goal is to secure the lowest rate possible.
Luckily, there are a few effective ways to reduce your rate.
One of the best ways to lower your interest rate on your car loan is to have a high credit score. When you apply for any type of loan, your credit score is one factor that determines your ability to snag a competitive rate.
If your score is a little low, take some time to give it a boost. You can work to improve your credit by..
There are tons of lenders out there ready to make you an offer on a car loan. Your job is to compare what these lenders have to offer, including their interest rates. Doing some comparison shopping can go a long way in helping you find the best deals.
If you can’t secure an affordable rate, consider adding a co-signer to your loan contract.
A co-signer is someone with good credit and a healthy income who promises to make loan payments if you fail to make them yourself at some point. This reduces the risk for the lender, who may reward you with a lower rate as a result.
Your Volkswagen car loan payments should fit comfortably within your budget. You don’t want to struggle to make payments every month. Volkswagen offers a few rebate programs and offers to help shave a few bucks off your purchase and ultimately lower your payments:
Whether you finance, lease, or buy your Volkswagen outright, you’ll receive 2 years of complimentary maintenance.
You can customize your Volkswagen to accommodate any mobility issues you may have with things such as carriers, lift equipment, hand controls, and other assistance equipment. Volkswagen can provide you with up to $1,000 toward the purchase of any of this equipment through the Mobility Discount.
If you recently graduated from a post-secondary institution and you finance or lease a certified used Volkswagen, you can take advantage of a rebate of up to $500 to be applied to your transaction. To be eligible for this rebate, you must meet the following criteria:
Missing a loan payment can cost you in more ways than one. Here’s what can happen if you miss a payment, depending on how much time has passed since the payment due date:
Generally speaking, car loan payments that are less than 30 days late will come with a warning from your lender to make up for the payment as soon as possible. Depending on the terms of your loan contract, you could also be slapped with a late payment penalty fee. As long as you make up for the missed payment within 30 days following its due date, no further action should be taken.
If your missed payment is more than 30 days late, you’ll deal with more serious consequences in addition to a penalty fee, depending on how long the payment is overdue:
If your auto loan payment is over 30 days late, the missed payment will be reported to the credit bureaus. When this happens, a note about the missed payment will be added to your credit report and can remain on your report for up to 6 years. In the meantime, your credit score will dip, which will have a negative impact on your personal finances.
Your car isn’t technically yours when you finance it. Instead, your lender places a lien on the title until you pay off your car loan in full. Until then, the lender has the right to repossess the vehicle if you default on the loan. If you’re 60 to 90 days late on a loan payment and fail to make up for it, you risk having your car repossessed.
Lenders don’t usually start the process of vehicle repossession until your loan has been delinquent for 60 to 90 days, as mentioned. However, vehicle repossession may occur before or after this window of time, depending on your exact circumstances.
If your Volkswagen is repossessed, you may have some options to get it back. For instance, you can make up for the missed payments, or try negotiating with the lender to secure more affordable terms or a different payment plan.
Vehicle repossessions are considered “involuntary” since you’re not giving up the car on your own accord. But you may also consider a “voluntary” repossession instead if you can no longer afford your payments.
Voluntary repossession involves returning your vehicle to the lender without them taking it from you. You may consider surrendering your vehicle voluntarily to avoid some of the extra fees the lender may charge if they had to pay a repo company to collect the vehicle from your home. You can also avoid having a collection agency come after you to collect the missed loan payments.
Voluntary repossession may also help you maintain a good relationship with the lender in case you choose to apply for a new loan in the future once you’ve gotten a better handle on your finances.
To voluntarily surrender your car, let the lender know that you can’t repay the remainder of your outstanding loan balance and arrange a time and place to drop the vehicle off.
Refinancing your Volkswagen car loan may be a great option if you’re looking to reduce your monthly payments. However, make sure that you can qualify for a better rate before refinancing, and crunch the numbers (including the cost to break your original car loan) to find out if refinancing makes financial sense.
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