5 Scenarios to Consider Refinancing Your Rent to Own Car in Melbourne
The process of getting a car in Melbourne can be tricky especially if you have a bad credit rating. This is because most mainstream financial institutions have a policy of not lending to blacklisted borrowers for fear of losing their money. The good news is, all is not lost because rent to own cars in Melbourne, give you another opportunity to own your dream car even as you work towards repairing your credit history. However, it is worth noting that because of your bad credit rating, you may have to accept higher interest rates when looking for finance.
Once you get the initial financing, you should always be on the lookout for opportunities to refinance your auto loan and get better terms which will ease your financial burden. Unlike refinancing a mortgage or consolidating credit card debts, refinancing a car loan is much easier, quicker and painless because no appraisal is required. Below are some of the scenarios which may present opportunities for you to do so.
When Interest Rates Have Gone Down
When the prevailing interest rates are lower probably by a couple of points compared to the level they were when you purchased your car, you could make some savings with auto refinancing. However, most lenders offer slightly higher refinancing rates for cars because they consider them used car loans. In whichever case, a drop in a percentage point or two can make such a big difference over the life of your car loan.
When Your Credit Score Has Improved
If you financed your car when your credit history had a few negatives or you had no credit history at all, it can be beneficial to you if you consider refinancing when your credit rating has improved. An improved credit rating stands a higher chance of qualifying you for a lower interest rate car loan because lenders consider you a lower risk borrower than when you had a poor credit history. However remember a bad credit rating stays with you for 5 – 7 years
If You Didn’t Get a Good Deal When You Purchased Your Car
Just because you have a bad credit score doesn’t mean you should get all the bad financing deals in the market. Rent to own car dealers in Melbourne have cash price contracts which means there is no interest but the cars are priced slightly higher to compensate for you having a bad credit rating and the Rent 2 Own dealer taking you on as a risk. However, when your credit rating improves, you should seize the moment and refinance because it pays to do so.
Your Financial Reality Has Deteriorated
When you suffer a financial setback which necessitates you reduce your car loan payments, the best way is to apply for financial relief, you do this by contacting your Rent 2 Own dealer and applying, this will increase the period of repayment and lower the amounts you need to pay weekly thereby not defaulting while at the same time enjoying a financial reprieve.
Your Lease is Expiring and You Want to Own the Car
Rent to own cars come with terms and conditions which upon fulfilling give you the opportunity to own the car for good. When the expiry of the rental period has matured and you want extra financing to enable you buy the car, you may consider refinancing if the rates are favorable.
At Rent to Own Cars in Melbourne, you own the car at the end of the contract providing you have made all your payments, there are no payouts or penalties.
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