Car Refinance

G

Gecko235

My girlfriend bought a new car 3 years ago on either 5-7 yr contract with 18% interest rate. Just crazy.

I think she still owes $10k maybe more on the loan still. I'm getting her to ring up and find out more details for me.

She's struggleing so I would like to know what options are there to try and help, refinance maybe?
 
Do you have a home loan?

If so, and depending on LVR, you might be able to set up a $10k split and take advantage of home loan rates. Just make sure you set up a short loan term of smash the repayments.

Cheers

Jamie
 
Yes I do and about to refinance but if I lend her $10k to pay off or whatever the amount is I'm worried about what happens if we split up.

Is it better choice for her to try and refinance with a bank?
 
Gecko235 said:
Yes I do and about to refinance but if I lend her $10k to pay off or whatever the amount is I'm worried about what happens if we split up.

Is it better choice for her to try and refinance with a bank?
Click to expand...
Don't lend her the 10k unless it's peanuts for you

If you split up, you've got to prove the 10k is a proper debt which means some written contract, which is messy

Also, why do you have to bail her out?

She also won't learn from her decisions
 
Gecko235 said:
Yes I do and about to refinance but if I lend her $10k to pay off or whatever the amount is I'm worried about what happens if we split up.

Is it better choice for her to try and refinance with a bank?
Click to expand...

Fair enough.

If you have those thoughts than leave it with her to sort out. She could possibly refi it to a lower rate (I don't know how car finance works).

Cheers

Jamie
 
Macca said:
Could be worth asking around for personal loan and use that to pay out car loan.

Not sure why but car loans seem to be dearer than holiday loans, which is kind of stupid, at least a car is of some value.

Something like this from Google http://www.citibank.com.au/Lending/...8.99-CL92014&Code=R1Z4NFS4&mzt=20141101084909
Click to expand...

Yet you see new car loan rates at cheap as chips rates of 3 & 4% by the car manufacturer ;)

Hang on, they are even less than that

The good news is that special advertised rates of 0 per cent to 1.9 per cent interest from car makers such as Holden, Ford, Nissan, Toyota and Kia do deliver on their promise. The catch is, you may end up paying more for your new car than you would if you had shopped around and paid cash, or even if you had taken out a personal loan.
Click to expand...

Link
 
Refinance could be an option for her. There's unsecured personal loan rates out there for less than 18%.

To pay out her existing car loan would be a debt consolidation loan and it would depend on her financial position as to how feasible this is or not as you say she is currently struggling to meet repayments. Has she missed any at all?

Generally banks don't like to refinance debt that is attached to an asset (even unsecured) and have the loan term longer than the expected usable life (or more so how long she's expected to own the car for) of said asset.

So say if she does refi her PL and request for a loan term of 7 years to make repayments more manageable the banks may not like it. In their eyes they see 5 years time when she wants to buy a new car (and maybe does) and still has the debt attached to her old car. She gets finance to get new car, refinances her old car debt that only has 2 years left and extends it out to another 5-7 years making it one long loan term and expensive car that isn't even owned anymore. I'm not saying your girlfriend is like that, but I've seen it many, many times and people just end up digging themselves deeper.

If she does her transactional banking with a mainstream bank her best bet would be to look into loan options her banks offer and see if that is a better deal. Existing customers score a lot better than new to bank customers. But in saying that, she would need good account conduct such as not overdrawing account and that kind of thing.
 
My brother picked up an unsecured Citibank loan for about 5% if it is for a refinance. However, you can ask the cheque to be written to yourself, and never have to prove its for re-finance.

From memory its called a redi-credit (or something).

Citi are painful to work with, but at 5% it might be worth the pain?

Blacky
 
If you lend her money for the car and you break up then you've lost it.

She will rationalise that she deserves the money and you owe her.

Even if you have a contract between you it's going to cost you more to fight it than It is worth.

Tell her to go see her bank for a personal loan. Or talk to her family about a short term loan.

She is an adult and needs to fix it herself. With your support and guidance but not your cash.
 
Geck, get a cheap loan, pay out the old loan and transfer the car to your name.

Get your girlfriend to repay the loan plus an extra $50 pm (which you keep). If you GF repays the loan then give her the $50pm that has accumulated and transfer car back to her.

If you split up, at least you have the car plus some extra money.
 
Have you heard of novated leases?
Disclaimer:
I don't know anything about them. But friends have them through work and apparently they provide tax benefits.
Something to consider if you will be refinancing anyway.
 
I'm trying to get her in to ring up about her contract and we are also going to see a bank to check out our options.

I'll let ya know what the outcome is.

I kinda like the idea of paying it out myself and keeping $50 a week lol. Probably buy some shares for her or put it in a savings account coz she is terrible with me.

Thanks guy.
 
depends on the loan, a lot of financiers like Capital won't let you just pay out the principal, they will want all the remaining interest for the term of the loan paid as well (so may as well just stay there) and if she is on a rogue lending rate like 18% chances are it has t's & c's just as ugly
 
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