Whether you’re looking to refinance a current loan or looking to get a finance approval with the lowest possible repayments, there are a few things you can do to help make your loan repayments as affordable as possible.
Improve your credit score
Your Credit Report will play a major role in determining the interest rate that financiers will offer you. Therefore, it is essential that you check your Credit Report on a regular basis to ensure all the information is correct. You can get a free copy of your Equifax Credit Report once a year directly through Equifax.
Make sure all the information on your Credit Report is up-to-date and ensure that if you move house, you inform all financiers and service providers that you have accounts with so you don’t miss any bills or payments. If there’s any errors or anything on your Credit Report that you are unsure about, contact the company directly to clarify.
It is extremely important to ensure all bills and loan repayments are paid on time to avoid late payments or defaults potentially being listed on your Credit Report as this will lower your credit score and reduce your chances of being approved for suitable finance.
It is also important to understand that every financier and service provider such as phone companies and telco companies can put an enquiry on your Credit Report when you apply for an account through them. Enquiries for things like phones, credit cards and finance can also reduce your Credit Score, so keep these to a minimum wherever possible.
Consider a balloon
A balloon or residual payment is a lump sum amount that you pay at the end of your loan term. This can help to reduce your ongoing finance repayments throughout the duration of the loan. However, it is important to keep in mind that there will be a lump sum payment due at the end of the loan term. We recommend seeking financial advice to see if this option is right for your circumstances.
Increase the loan term
Increasing the loan term will reduce the ongoing finance repayments over the duration of the loan as well. But keep in mind that you may end up paying slightly more interest over the life of the loan. Depending on your budget and how much you can afford to spend on repayments, you may want to consider a longer loan term to help reduce your ongoing repayments. However, the faster you can comfortably pay your loan back, the more you can potentially save in interest.
Add a deposit
If you are able to save up a deposit for your finance, you will be able to reduce your ongoing repayments since you won’t be borrowing as much money.
Refinance for a better rate
Sometimes we all make emotional purchase decisions which can come back to bite us later. However, you can always speak to your Loans For U Finance Consultant who can assist you to refinance an existing loan. Whether you want to reduce your ongoing repayments, pay your loan out over a shorter/longer term or simply just get a better deal, we’re here to help!
Contact your Loans For U Finance Consultant today for an obligation-free chat about your finance needs on 1800 538 287.
