Buying a car is a major expense that commands a big chunk of your salary. Considering the long distances South Africans travel daily to and from work, most people opt to buy their own means of transport. However, very few people can buy a car for cash, and most have to rely on financial institutions for finance. There are many reasons why you might not get the best terms when negotiating a loan to buy a car. Many criteria are taken into consideration when you are offered a loan.
The only constant is change, so it is worth applying for refinancing, because it might give you the opportunity to pay off your current loan on renegotiated – and therefore more favourable – terms. It means that your current car loan and its title are transferred to a different financial institution, to whom you will henceforth pay your monthly instalments.
The benefits of refinancing your car
- The interest rate is usually lower.
- Your monthly instalment is usually lower.
- You could probably pay off your loan much faster.
- You could possibly get a 1- or 2-month payment holiday.
Additionally, where your loan amount is more than the value of your vehicle, refinancing usually corrects this discrepancy. In the end, refinancing your vehicle can save you money. There are, however, a few disadvantages you should be aware of.
Disadvantages to refinancing your vehicle
- Reapplying for a loan could possibly have a negative effect on your credit score
- There would probably be financing fees charged
- Of course, you might not qualify
Before you decide to take the plunge and try to re-finance your vehicle, you should make sure that both you and the vehicle in question meets all the requirements. Keep in mind, though, that different financial institutions have different requirements.
Requirements for refinancing your vehicle
- You must be a South African citizen.
- You must have a sound credit rating.
- You must have a valid South African driving licence.
- The car must be a 2001 model or newer.
- The car’s value should be at least R45 000.
- You earn a salary of at least R6 500 per month.
How can Citton Cars help you with your refinancing?
Citton Cars have designated people on site who specifically deal with financing and refinancing. They can guide you through the process, explain all the details, and help you get the best deal, taking all factors into consideration.
Stop by or contact us, and see what our people can do for you. You are under absolutely no obligation to sign any contract when getting your quote. Our business is people, and customer satisfaction our measure of quality service.