Loans Canada Launches Free Credit Score Portal And Is Recognized As One Of Canada’s Top Growing Companies
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
Every year, you go through long-term budget arrangements and try to find new ways to save. Car refinancing has the potential to improve your monthly budget. Those who entered into a subprime auto loan and have since gotten a raise, reduced debt, or improved their credit, may be eligible for refinancing. To learn whether auto refinancing is the right step, it’s important to learn the options available to you. Armed with this information, you can make an informed decision and choose the best possible refinancing arrangement.
Yes, you can refinance your car loan in Canada, however, there may be certain fees and penalties associated with it depending on the lender. Car loan refinancing means you’re replacing your current car loan with a new one that will either have better rates, terms or both.
Amount | Interest | Term (months) | ||
![]() | Up to $50,000 | 13% + | 12 – 72 | Learn more |
Since refinancing isn’t much different than making a car purchase, chances are you already have most of the information you need. However, before you take the leap, be certain that you are eligible to refinance your car loan.
Consider whether you have defaulted on the lease or are in good standing. Be sure that your credit score and working situation are stable and viable for refinancing. Provided you are eligible for the new loan, the next step is getting your documents together.
Ensuring that you have all the essential documentation is not only important, but it is also a great way to speed up the process and develop a better rapport with the lender. Preparing ahead of time gives you a good opportunity to highlight all reasons for refinancing in an organized manner.
Want To Lower Your Car Payments?
Speak with a Loans Canada representative today and learn how you can refinance your car loan and save. Call us today at 1-877-995-6269 or click here.
Note: Program is currently not offered in Quebec.
The process of auto refinancing is actually fairly straightforward. It works in a similar manner to the original purchase. However, unlike haggling about the value of the vehicle, you are locked into the cost associated with the original purchase. Essentially, the new lender buys your debt (pays for the car’s remaining value) and then lends that amount to you, typically at a lower rate and with an improved term.
There is some key information to gather before taking the leap.
Before applying to refinance, consider the following to see if it’s the right option for you:
Approach the lender and discuss the interest rates available, along with any fees you will be expected to pay. Find out if there are penalties associated with refinancing and learn what the term of the new loan will be. Determine whether the costs of refinancing, both immediate and over the long term. From there, you can decide if it is amenable to your financial situation.
If you’re able to determine that refinancing provides you with more benefits than drawbacks, you can apply for refinancing. Be sure to compare offers from various lenders to secure the best rate. You can use an online loan comparison platform like Loans Canada to get multiple offers with a single application.
In order to decide how to approach your refinancing, there are some key things to consider. A key aspect is the duration of the new car loan term. The term of the agreement dictates what it will cost you in the long run. Loans with a shorter term will cost more on a monthly basis, though will end sooner. This results in less interest payments over time.
Conversely, longer-term agreements have smaller monthly payments. However, that does not mean you will ultimately pay less. Long-term loans have more time to compound the interest. It results in your paying a significantly higher price for the vehicle than you would with a shorter term.
In order to decide whether car refinancing is the right option for you, consider the following:
Consider your ability to make payments and how much you can afford. Weigh this against your willingness to pay out the loan faster, even if it means some frugality. Additionally, consider whether you will qualify for a better rate. If your credit is better than when you initially entered into the agreement, you should be fine to proceed.
When you pay out a loan over a longer term, you are eventually spending more in interest. Depending on how well you are able to make your existing regular payments, it may be worth discharging the loan faster. Conversely, if you’re struggling and don’t have a long-term solution yet, refinancing is a reasonable option.
Your monthly payments with a refinance are likely to be lower if you choose to extend your term. You will end up paying more in the long run. Often, during financially trying times, it is easy to think about the short term. However, it is essential that you factor in your long-term goals and how this will affect you both monetarily and in terms of credit.
In most situations, refinancing is sought to get a lower interest point. Keep in mind that even if you receive a new lower interest rate, if you extend your loan term significantly, you may end up paying more in the long run. When you make your decision, ensure that you have real numbers for the total you will pay so that you can compare the arrangements objectively.
Just like with any financial arrangement, it is important to keep your eyes out for red flags.
There is a time and a place for most things, including car refinancing. Whether you signed on with a high-interest rate and want to reduce expenses or simply had a windfall, continual financial assessment is essential to long-term success. So long as you keep your long-term financial goals in mind, refinancing can be a rewarding opportunity.
Rating of 5/5 based on 19 votes.
Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
Frank Mortgage is Canada’s one-stop shop for mortgages. Get up to $1,500 cash back on your mortgage.
Great unsecured credit card for customers currently in, or recently discharged from, a consumer proposal or bankruptcy
Earn an average 5%¹ cashback at thousands of partners and at least 0.5%² cashback guaranteed with Neo.
KOHO’s Credit Building Program helps you build a better credit history with easy to manage payments for just $10/month.
All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.
When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.
Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.