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What is refinancing?
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Refinancing involves paying out an existing loan by taking out another. The new one replaces the old one and you transfer the debt from one financial institution or product to another.
It is common for consumers to consider home loan refinancing or car loan refinancing.
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Why refinance?
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As your circumstances and lifestyle changes, you may need to review your existing loans from time to time to see if they still meet your current needs. There are a number of reasons why people choose to refinance loans:
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- People often refinance their existing loan to a loan with a lower interest rate to save on interest or reduce their monthly repayments or term of the loan.
- To consolidate multiple debts into the one loan, resulting in one easy to manage repayment. Find out more about debt consolidation.
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- To reduce the monthly repayment amount by increasing the term of the loan. Reducing the monthly repayment amount can help free up more cash to be able to meet other financial commitments or to buy the things you want sooner.
- To free up cash by tapping in to built up equity in their homes. This can be used as a wealth creation tool as the money can then be used to invest.
- To refinance to a loan with features that better meets their needs, such as switching from a variable to fixed rate, or obtaining a loan with an offset account, a redraw facility or the ability to make additional repayments.
- To borrowing against the equity in their home in order to fund renovations
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What you need to take in to account
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Before you refinance your loan, you need to take in to account costs to exit your current loan such as exit fees, as well as costs associated with taking out a new loan such as application fees. This will help you weigh up the true cost of switching your loan.
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Refinance your loan to Community First
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Whether you’re looking to refinance your home loan, personal loan or credit cards, or whether you want to consolidate debt, reduce your interest rate or access your equity, we can help with your loan refinancing needs.
If you’d like to speak to us about refinancing your loan, you can contact us on 1300 13 22 77 or visit your nearest financial services store.
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Alternatively, for help on deciding which home loan is right for you, visit our home loan selector tool or find out more about our personal loans, car loans or credit cards.
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Calculators
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Use our interactive calculators to help you calculate repayments and compare loans:
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