If you refinance your car or personal loan with a reputable Singapore firm, you are most likely expecting to reduce your monthly payment. However, a lower monthly payment scheme may result in more money out of your pocket over the term of your loan. Refinancing can lower your credit score temporarily but may improve it in the long run. Here are six things to consider when determining whether or not to refinance your car loan.

#1 Firm Refinance Requirements

Each bank or lender has different refinancing criteria. Ensure to inquire about the specific car refinancing terms a Singapore financial firm offers. Most loan terms hinge on the age of your car, its mileage and how much is unpaid from your previous loan. Many firms offer an auto loan refinance calculator that will show you whether you can save money by refinancing.

#2 Penalties for Prepayment 

Determine whether your current lender charges a prepayment penalty for your new or second hand car loan in Singapore. If you are, do the math. If the amount you save by refinancing is much more substantial than the penalty, refinancing may still be a wise decision.

#3 Rate of Interest 

It may be an excellent time to refinance a car if the interest rate you qualify for today is much lower than your current loan rate. If it is the same or more, now is not the best time to refinance. However, some financial firms offer a reward system for the car refinancing scheme for clients in Singapore. You can save up to 0.50% interest rate if you are eligible.

#4 Current Credit Score 

Your credit score may reflect significant changes after purchasing the new or used car you saw for sale in a car lot in Singapore. If your credit score improves, you may be able to qualify for a cheaper interest rate.

#5 Regular Income

Opting to refinance your car or personal loan with a reputable Singapore firm may be great if there has been a decrease in your income. The smaller payment can help relieve the burden on your monthly budget.

#6 Remaining Loan

You can cut your payments and put more money in your pocket by refinancing or extending your loan term. However, you may wind up paying more in interest over time. Getting a loan or car refinancing from a reputable Singapore firm can lower interest rates for the same or a shorter period.

Think One Automobile & Trading Pte Ltd is your one-stop shop for automobile purchases, sales, and exports. They also provide renewal insurance and seek better lease terms. Think One also offers vehicle leasing to clients in Singapore.