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  • FIRST POST
    • neo1607
    • By neo1607 15th Apr 19, 3:51 PM
    • 104Posts
    • 108Thanks
    neo1607
    Re-Financing Car loan at Lower APR?
    • #1
    • 15th Apr 19, 3:51 PM
    Re-Financing Car loan at Lower APR? 15th Apr 19 at 3:51 PM
    To cut a long story short my old car died in November last year and was going to cost double what's its worth to fix it. So I traded it in at a garage and I obtained finance for a new car via CarFinance 24/7. Due to a few poor judgements 3 - 4 years ago my credit rating was shot

    So anyway the lowest APR they could offer me at the time was 19.8% which I took with the idea that once my credit score Improves I would refinance at a lower rate. It's now been 6 months and I have done some soft checks online and have now found that Zuto and CarFinance 24/7 can offer me lower rates of 9.5% APR with an 80% chance of being accepted.

    I have 5980 early settlement on the car so going with this lower APR I would only have 930 interest to pay instead of the 1863 I'm paying on it now. My monthly payments would also be 25 less

    Do I go for this 9.5% just now or hold out another 6 months and hope I'm eligible for the likes of Tesco/Sainsburys/Hitachi at their 3.9% offers?
Page 1
    • zx81
    • By zx81 15th Apr 19, 3:58 PM
    • 21,685 Posts
    • 23,575 Thanks
    zx81
    • #2
    • 15th Apr 19, 3:58 PM
    • #2
    • 15th Apr 19, 3:58 PM
    It depends on your circumstances. You may not even get offer the 9.5%, as you have a poor credit history and existing debts.

    It's unlikely you've going to be getting low headline rates from what you've said.
    • neo1607
    • By neo1607 15th Apr 19, 4:02 PM
    • 104 Posts
    • 108 Thanks
    neo1607
    • #3
    • 15th Apr 19, 4:02 PM
    • #3
    • 15th Apr 19, 4:02 PM
    According to Clearscore there's 80% chance I get offered that rate. The debate I'm having with myself though is I do end up getting it and I save myself close to 1000 in interest, or I get rejected and it's a hard search on my file.

    Although it may balance my file out because there's 5 hard searches due to be removed tomorrow according to Clearscore
    • zx81
    • By zx81 15th Apr 19, 4:04 PM
    • 21,685 Posts
    • 23,575 Thanks
    zx81
    • #4
    • 15th Apr 19, 4:04 PM
    • #4
    • 15th Apr 19, 4:04 PM
    A search is neither here nor there. Don't let that stop you reducing your costs.
    • neo1607
    • By neo1607 15th Apr 19, 4:08 PM
    • 104 Posts
    • 108 Thanks
    neo1607
    • #5
    • 15th Apr 19, 4:08 PM
    • #5
    • 15th Apr 19, 4:08 PM
    The other part of the question is Does a car finance agreement hit hard against a mortgage application? Me and my partner are due to put in a joint application nearer the end of the year will applying to re-finance my car 7 - 8 months before hand make any difference. Or will it actually help the application as my car loan total will be 1000 lower?
    • foxy-stoat
    • By foxy-stoat 15th Apr 19, 4:31 PM
    • 3,975 Posts
    • 2,310 Thanks
    foxy-stoat
    • #6
    • 15th Apr 19, 4:31 PM
    • #6
    • 15th Apr 19, 4:31 PM
    Will make very little difference as long as you only borrow what you need to clear the original finance.

    Good luck, you may or may not get a good rate as you are debt consolidating rather than borrowing for a car.
    • Penelopa.Pitstop
    • By Penelopa.Pitstop 16th Apr 19, 1:28 PM
    • 450 Posts
    • 161 Thanks
    Penelopa.Pitstop
    • #7
    • 16th Apr 19, 1:28 PM
    • #7
    • 16th Apr 19, 1:28 PM
    You can refinance now if it saves you considerable amount of interest. You will have successfully settled account on your history and new one will be couple of month old and shouldn't cause issues when applying for mortgage.

    • neo1607
    • By neo1607 16th Apr 19, 5:32 PM
    • 104 Posts
    • 108 Thanks
    neo1607
    • #8
    • 16th Apr 19, 5:32 PM
    • #8
    • 16th Apr 19, 5:32 PM
    Got in touch with Zuto and applied via Clearscore in hopes of the 9.5%

    Apparently the lender that offers the 9.5% APR is only for purchase of a new car from a garage, the only lenders they have that offer re-finance options are at a whopping 31% APR. They obviously got told where to go

    Looks like I will have to stick with my current finance another few months and hopefully my score increases some more that more lower APR lenders become available to me
    • Tarambor
    • By Tarambor 17th Apr 19, 6:03 AM
    • 4,845 Posts
    • 3,788 Thanks
    Tarambor
    • #9
    • 17th Apr 19, 6:03 AM
    • #9
    • 17th Apr 19, 6:03 AM
    Why not see what your bank is offering for personal loans?
    • Herzlos
    • By Herzlos 19th Apr 19, 9:43 PM
    • 9,426 Posts
    • 8,769 Thanks
    Herzlos
    Yeah, you don't need to be looking at specifically car finance, just a personal loan for a car should be sufficient.
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