PCP Balloon due soon or Looking To Reduce Your Current Monthly Payment?
Representative Example
Rates from 9.9% APR, Representative APR 21.4%. Borrowing £10,000 over 60 months with a representative APR of 21.4% fixed rate, monthly payment £260.83, Total cost of credit £5,650, total amount repayable £15,750.Presto Finance Ltd is a credit broker, not a lender.
Car Refinancing: What Is It and How Does It Work?
Car refinancing means replacing your current finance agreement with a new one, typically with a new lender. The new loan is used to settle your existing car finance balance.
Your current deal will be cleared with a one-off payment, either covered byyour new lender or added to your new loan amount. Terms vary, so always confirmwhat applies to your situation.
Why Refinance Your Car?
Refinancing can help adapt your car loan to suit your current needs. Circumstances change, and a deal that worked before might no longer be right for you.
Common reasons include:
- Lower Monthly Payments: If expenses have increased, refinancing can help reduce your payments by extending the loan term.
- Improved Credit Score: If your credit score has improved, you may qualify for abetter interest rate, reducing your costs.
- End of PCP Agreement: Use refinancing to cover the balloon payment and keep thecar you love.
- Change in Borrower Needs: Switch from joint finance to an individual loan.
Benefits of Refinancing
- Save Money: Refinancing could secure a cheaper deal with lower monthlypayments.
- Manage Balloon Payments: Break down large PCP balloon payments into smaller,manageable instalments.
- Flexible Options: Adjust your loan to match your financial goals.
Things to Consider
- Lower payments might extend the loan term, increasing the total amount payable.
- Refinancing a balloon payment will include interest, so it may cost more overall.
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