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When Can I Renegotiate My Car Loan?


If you’re like most Canadians, then it’s probably taking you longer than normal to pay off your loan. While your car loan is one of the biggest financial obligations you have, it does not need to be a permanent source of annoyance. This is because you can renegotiate your car loan and pay it off faster. Why is paying off your loan fast useful? Let’s find out.

Renegotiating existing car loans

Why Is It Useful to PayOff Your Car Loan Fast?

A car loan is not just one of the biggest obligations for Canadians, but it is also one of the biggest reasons they are in debt. When you are in debt, you can’t buy what you want when you want it. This is why paying off your car loan fast is recommended. By doing this, you will free up some of your money for things that you want. If you don’t want your debt to become a handicap, then start to look for ways to pay off your loan fast.

There are countless reasons for you to pay off your loan faster. When you pay off your loan fast, you are able to more quickly free up money that you need for your other financial needs and/or obligations. Another great benefit of paying off the car loan faster is improving your credit score. By paying off your car loan faster, you automatically improve your credit score.

There are many more benefits of paying off the car loan faster. It would probably take a few thousand words to list all of them here. So, we’ll leave the benefits for another time and focus on the main subject at hand which is when you should look to renegotiate your car loan.

Before you look to renegotiate your car loan, try all other ways to pay off your loan fast. If none of them work, then you can look to renegotiate your Hamilton car loan. The first thing you need to try to pay off your car loan fast is early repayments. Let’s take at how early repayments work.

How Early Repayments Work

When it comes to paying off your car loan early, you can try a few different methods. While they work in different ways, all these methods allow you to pay off your car loan early. Following are the methods or ways you can use to pay off your car loan early.

1. Additional Payments or Lump Sum

Lump sum does not mean that you need to repay your car loan in full. Instead, it requires supplementing your regular payments with ‘additional’ payments during the loan tenure. However, you must remember that restrictions may be applied to these payments by lenders. This is especially true for fixed-rate loans.

2. Using a Variable Loan Rate

You have to face fewer restrictions with a variable loan rate. A variable loan rate allows you to repay the remaining balance of the car loan at a variable rate. Also, lenders are unlikely to subject you to break fees as they lose little by allowing you to pay off the loan early. You can use an online loan repayment calculator to determine the amount you’d have to pay each month to pay off your loan with a variable rate.

3. Making the Entire Loan Repayment During a Fixed Rate Period

This option is worth exploring if you’re someone who is not afraid of restrictions. By using this option, you can repay the remaining loan balance during a fixed daily period. The lender will apply break costs and administration fees to make up for the cost they have lost. Once again, you can use a loan repayment calculator to work out the cost and the monthly payment you’d need to make.

While early repayments are a good way to pay off you Hamilton car loan fast, they are not always the best option depending on your circumstances and budget. In such a situation, you may want to explore other options to repay your loan fast before you think about renegotiating your car loan. We’re going to discuss these options next.

Some Ways to Repay Your Car Loan Fast

Pay off Hamilton car loan faster

While making early payments is a good way to pay off your car loan fast, they are not the only way to repay your car loan faster. There are some other ways as well that you can try to pay off your Hamilton car loan early. These ways are discussed below:

1. Make Bi-Weekly Payments

If you’re offered this opportunity, then make use of it. This option allows you to repay the lender with twenty-six half payments every year. When people make monthly payments, the total number of full payments they make during a year is twelve. However, the bi-weekly payment option allows you to make thirteen full payments. Following are all the benefits you get with this loan repayment option:

  • An additional yearly payment
  • Less interest accumulation
  • Making the repayment before schedule

If you choose this option, use a loan repayment calculator to work out the total tenure of the loan and the interest you would have paid at the loan’s maturity.

2. Round Off Your Payments

If your budget allows it, then one of the easiest ways to pay off your loan fast is making a higher payment by rounding off your payments. This option does not require too much effort on your part and it still works extremely well to help you pay off the loan fast. Following is an example of how this option works.

Assume for a second that the monthly payment you need to make to repay the Hamilton car loan is $254.56. However, you decide to round it up to $300. This adds $45.04 to your monthly car loan payments. If you multiply this amount by 12, then the figure you’ll get is 540.48. That is more than the number of additional payments for the year.

It goes without saying that rounding off the amount to make a higher payment each year will help you to pay off your loan faster. A loan repayment calculator will be extremely useful here to work out that total tenure of the loan if you pay off your car loan this way.

3. Utilize the ‘Snowball’ Method

The snowball method can be used for all types of loan including a car loan. How does the snowball method work? It works in an extremely simple way. The snowball method requires you to start with your lowest debt. This means that you should look to pay off your lowest debt first by dedicating most of your funds towards its repayment.

Once this debt is paid, move onto the second lowest debt. Keeping repeating this until all of your debt is gone. The snowball method works because it makes it more manageable to pay off your loans. Within a few years, all of your debt could be gone if you use the snowball method. However, you need to make sure of one thing when using this option to pay off your car loan cast: don’t accumulate any more debt than you already have. If this happens, then the snowball method will not work in your favor.

4. Consider Selling The ‘Extra’ Belongings You Have

This is somewhat like a garage sale. The only difference is that it is on a much bigger scale. If you have belongings that you no longer use, sell them off to generate funds to make your loan repayments. Think of any electronic items, books, clothes, shoes or other things in your home that you haven’t used for months or even years. If you can think of such things in your home, then it might be time to sell them off.

Today, selling off the ‘extra’ items in your home is easier than ever. This is because of marketplaces that allow you to put your belongings up for sale online. By selling off the extra belongings online, you’ll be able to generate funds that you can use to pay off your car loan faster. Once you have extra money to pay off your car loan, you can either round off your payments, make bi-weekly payments, or simply renegotiate your car loan to repay the loan faster.

5. End You Cable or Satellite Subscription

Wondering how on earth this is related to paying off your loan faster? Hear me out. When you subscribe to a satellite or cable TV provider, you spend a lot of money on a service that you could get for peanuts online. With options such as AppleTV, Hulu, Chromecast, Netflix and so many others available today, it does not make any sense to pay hundreds of dollars for a cable or satellite subscription.

By ending your satellite or cable TV subscription and using the online services instead, you can save up to $200 each month. This could be equal to an entire monthly car loan payment. If you renegotiate your car loan to make twice the amount of the monthly payment you’re currently making, then you could pay off your car loan in half the time of the original loan tenure.

6. Renegotiate Your Car Loan

If all the above methods fail to help you pay off your loan, then you always have the option of renegotiating your Hamilton car loan. By renegotiating your car loan, you can save on interest, lower your payment or reduce the tenure of your loan. The good news is that you won’t have to put in a lot of effort to renegotiate your loan since many lenders already offer this option. In fact, some of them will be willing to negotiate your car loan even if you have bad credit. By renegotiating your car loan, you can lower the interest or shorten the loan term to pay off your loan earlier.

Tips to Renegotiate Your Car Loan

Getting approval for Hamilton car loan

Following are some tips that will prove useful in renegotiating your car loan when you’re finally ready for it.

1. Don’t Let Your Emotions Rule You

You might be in love with your car but do not allow your emotions to lead you to a compromise on the negotiation table. If you listen to your heart instead of your brain, then chances are that you will accept all of the renegotiation conditions and terms put forth by the lender. Make sure this does not happen if you want to get the best deal and pay off your Hamilton car loan fast.

2. Stay Calm and Be Ready to Give and Take

The purpose of any negotiation is to come to a solution that works in favor of all the parties involved. When you walk into the negotiation room, make sure you are calm and willing to listen to what the lender has to say. If you enter the room with a ‘my way or the highway’ mindset, then you won’t get much out of the negotiation. Therefore, you should listen to what the lender has to say and then put forth your suggestions. This is likely to bring a fruitful outcome for both you and the lender.

3. Double-Check the Renegotiated Terms and Conditions Before Agreeing to Them

To ensure the figures in the contract are what you agreed to on the renegotiation table, double check them. Ensure that the total repayment amount and the monthly repayments in the contract are the same as the amount agreed during the negotiation. To make sure that thing work out the way you want them to, use a car loan repayment calculator. Doing all this is important because once you renegotiate a car loan, getting the lender back of the negotiation table can be extremely difficult.

Final Word

Using the above information, you can determine the best time to start thinking about renegotiating your car loan. Once you have decided to renegotiate your car loan, then you can use the tips given above to get the best deal from the lender.

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