Should I Refinance My Personal Loan

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Should I Refinance My Personal Loan?

We’ve talked about how hard it is to go from renting to finally owning your home. There are home loans, mortgages, and probably some debts you’re still working on paying off. If those debts exist as personal loans, it may be in your best interest to refinance them. You could get a lower rate that makes it easier for you to make a bigger down payment.

Let’s explore how that would work below:

Why Refinance?

If you took out a personal loan more than three years ago, it’s worth it to look around at current rates. The financial environment is always changing and banks have to change to keep up with it. You could be looking at a lower interest rate, fewer fees or more/less time to pay off your loan. Keep reading to see if this is a good choice for you.

Which Loans are Worth Refinancing?

Before you run off to the banks, look at the current situation of your loan. There a few things you should keep in mind. You don’t want to apply to refinance when you’re near to paying off your loan. Most banks have fees for balance transfers to other institutions. You need to make sure the fee won’t cost you more than what refinancing could save you.

This means you’ll need to look for the break even point. Read the terms of your current loan and find out what your bank’s exit or transfer fee is. Then use that to calculate potential savings from other lenders.

Don’t be afraid to go outside the traditional lending system either. There are lots of new ways and lenders to find loans with that don’t involve putting on a suit and going to the bank. Some institutions or websites have financial calculators that will help you compare the costs of different offers. You want to do all the research you can before making your decision.

The security of your income matters when you’re looking at refinancing as well. With the Australian market as it is, you need to be able to pay your bills were something to happen that you didn’t plan for in your finances. Does your financial life look stable for the next three or so years?

How to Get Approved

Put your best financial foot forward. When you are looking at refinancing, you’re essentially applying for a new loan. You need to make sure your finances are in interview-ready shape. This means paying off anything that you can and making sure you don’t have outstanding debts. Pay off credit cards and make sure you are ready for this change.

Consult with an Alchemy Finance broker, and together we can assess your current financial situation to find the solutions that will help you reach your financial goals.

Our Panel Of Lenders

At Alchemy Lifestyle Group, we have a wide range of specialist lenders that can help you achieve your financial goals.