Refinancing – The process and the benefits

By August 20, 2019Refinancing

There are some industries that you just don’t want to venture into without having someone you trust at your back. Finance is one that, for the uninitiated, the longer you look into it, the less clear it seems.

A quick search of ‘refinancing’ turns up seemingly infinite articles on ‘why you should refinance a home loan’, and ‘when to refinance a business loan’. Chances are, there’s plenty of things you’d rather be doing than searching at all. 

To make things easy, we’ve put together a hard and fast, no-nonsense guide to refinancing: 

What is refinancing?

Refinancing involves taking out a new loan to repay an existing loan. It may be with the same loan provider, or a new one. There are a number of reasons for doing this, and depending on your circumstance, refinancing may be a great option for you. No matter what position you’re in, it’s something worth getting right.

Why should I consider refinancing my loan?

You should consider refinancing if any of the following criteria apply to you:

  • Your monthly repayments are too high to manage 
  • You have multiple loans and want to consolidate them to make things simpler
  • You’re paying a lot of interest and want a better rate
  • You want to change to a more secure, fixed-rate (as opposed to variable-rate) 
  • You need to free up cash from being tied up in your loans

If you answered yes to the above, then refinancing might be a fantastic opportunity for you.

It can be life-changing to have the chance to improve your ongoing financial commitments, or know that by reorganising your affairs, you’re reducing what you need to repay overall.

How does refinancing help me with my problem?

Straight off the bat, the idea of a new loan to replace an old loan may sound counter-intuitive. By making the right choice though, you can get a much better deal and benefit in the long run. Getting a new loan can mean:

  • more reasonable (and viable) repayments
  • a simpler and more manageable financial situation 
  • Lower interest rates so you don’t pay more than you need to
  • Security knowing what you need to pay in future
  • More freedom with your spending

Still sound like something you need? On to the next step…

How do I know if refinancing is the right choice for me?

Knowing whether you should take the step of refinancing will depend heavily on the nature of the loan you want to cover with the new loan. For example;

Was it a business loan for a car? Or perhaps a personal loan when you’re self employed? 

What was the fine print of your loan and how will it be affected by refinancing? 

The fine print can get a bit tricky. Making choices with anything short of a clear, informed idea of your options can have serious consequences. The best way to move forward confidently is to have a specialist who can look at your unique financial situation and give you a thorough understanding of what the risks may be. 

SFE Loans are a team of highly-experienced lending professionals who understand the importance of working alongside clients on their journey to success. We’ll empower you to understand and command your own financial future.

If you’d like to know whether or where to refinance your home loan, you can contact us here.