As the calls for a potential interest rate increase have been growing over the past few months, and with the data now supporting this possibility, forward-thinking business operators are taking the initiative to assess their financial situation, including their truck loans. They are considering potential adjustments that could put them in a better position before any rate hikes occur. Given the increasing likelihood of a cash rate rise this year and the subsequent impact on lending rates, now could be an opportune moment to consider refinancing your truck loan.
However, if the idea of exploring this option seems daunting due to time constraints and concerns about dealing with paperwork, rest assured that your Jade Truck Loans consultant is here to assist. They will manage all the intricacies and labour-intensive tasks on your behalf, making the process seamless and hassle-free for you.
Reasons for Refinancing
The need to or interest in truck refinancing a truck loan can arise due to a number of circumstances, which may include:-
- Need to reduce outgoings by getting a loan with a lower monthly repayment.
- Achieve a cheaper interest rate than current loan to reduce repayments and overall loan costs.
- Relieve pressures of cost rises in other areas such as fuel and materials.
- Reduce operating costs overall to address impacts on business from material supply shortages which may be causing delays in contracts or reduction in work.
- Improvement in credit position. If the current truck loan was secured as a truck finance for poor credit at higher interest rate and over time the finance and credit position has improved. The new situation could pave the way for a better truck loan offer.
- Change in business structure. The departure of a business partner or introduction of a new business partner may require loans to be refinanced.
- Need to change security held against the loan. If the existing loan is a low docs truck loan, additional security may have been requested. A change in the ownership or circumstances around the additional security such as a property, may present cause to refinance loans.
Machinations of Refinancing
Refinancing a truck loan is the process of replacing a current truck loan with a new finance arrangement. As it involves a new loan, our consultants source a quote from across our lender panel which includes banks, non-bank lenders and specialist heavy vehicle and equipment lenders.
Lenders will assess the new application based on the current position of the business. If the business is a sole trader or ABN only holder, the financials and credit profile of the business owner are typically also assessed.
Our dedicated consultants take a thorough approach to refinancing by presenting you with a quote that outlines the potential benefits and outcomes. If, after reviewing the offer, it becomes clear that the proposed refinancing arrangement wouldn't enhance your business's position or achieve your targeted objectives, our team will provide advice against proceeding. It's important to note that requesting a quote from us comes with no obligations, ensuring you have the freedom to explore your options.
As you consider refinancing, remember to take into account the associated fees and charges related to concluding your existing truck loan and setting up the new financing arrangement. Our goal is to ensure transparency in all aspects of the refinancing process.
Whether you're looking to refinance various types of vehicles or different types of loans, our services cater to your needs. It's worth noting that when refinancing a vehicle, it's typically treated as a second-hand asset, which might lead to variations in interest rates and loan conditions compared to those for new vehicles.
Refinancing Loan Types
When refinancing, business operators can select the loan type that best suits their business. The type of loan does not need to be the same as the existing loan. For example if the current loan is a Truck Lease, the refinanced loan does not have to also be a Lease. It can be any of the loan types available:-
- Chattel Mortgage for truck & trailer finances
- Rent to Buy truck loans
- Commercial Hire Purchase
Many truck buyers have been opting for Chattel Mortgage recently to take advantage of the tax benefits offered by IAWO and temporary full expensing. However, these measures may not be eligible under the criteria as set out by the RBA. These measures apply to newly-acquired assets.
Interest Rates on Refinanced Loans
Refinanced truck loans are priced based on the Truck Finance & Leasing Interest Rates. With rates currently at historic lows across many lending markets and a rate rise looking highly likely, now could be a good time to move with any refinancing plans.
Terms for truck loan can be up to 7 years. If the current loan is mid-term, this can mean it was secured at much higher interest rate than is currently available. Even when the age and condition of the vehicle is taken into consideration.
Refer to our Loan Repayment Calculator to see our current interest rates on truck loans.
How to Achieve Best Refinancing Outcome
Utilising our services as highly experienced truck finance brokers can be a smart step towards achieving the optimum refinancing outcome. Our consultants have the expertise to structure the refinanced deal to specifically suit individual circumstances and to achieve specific objectives.
Get in now with a request for a quote to refinance your truck loan ahead of a predicted increase in lending rates in 2022.
Contact Jade Truck Loans on 1300 000 003 to discuss refinancing a truck loan.
DISCLAIMER: THIS INFORMATION IS ISSUED PURELY FOR THE PURPOSE OF GENERAL INFORMATION PROVISION. IT IS NOT TO BE TAKEN AS THE ONLY SOURCE OF INFORMATION FOR BASING FINANCIAL DECISION-MAKING. THOSE REQUIRING FINANCIAL GUIDANCE AND ADVICE SHOULD CONSULT WITH THEIR FINANCIAL CONSULTANT OR ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY MISREPRESENTATION OF POLICIES, DATA OR ERRORS IN THIS CONTENT.