When Is The Right Time To Refinance?
Refinancing: The story of James and how he discovered the secret of refinancing loans
Refinancing is easy, yeah? Go to your bank, wait in the queue, and then talk to the loans officer about your options to refinance. Then you’re done, right?
This is what James thought. James is a family man, who has a stable job but was finding it a little hard to pay for all the bills after the mortgage repayment was taken out of his account each month. He also noticed that his credit card debt was never really reducing, because he could only afford the minimum repayment each month (With regulars such as groceries and utility bills, and school fees and car maintenance on top of that, he’s not alone there!), and he knew that the interest rate on the credit card was almost three times the rate of his home loan. What James didn’t know, was that the secret of refinancing is to compare a whole bunch of rates and offers from a wide variety of lenders before making a decision. Luckily for him, when he spoke with his bank’s loans officer, the guy seemed extremely keen to sign James up to a new loan on the spot and kept mentioning that there was no need to compare, because it was the best value loan on the market. James didn’t feel comfortable in signing up straight away so he took all the information home to have a think about it.
James did a little bit of his own research and found out the secret. As he thought about it more and more, he realised it was so very logical. He would spend a few hours at a shopping centre looking around for the best value household items… Why then wouldn’t he shop around for the best refinancing loan? It was only logical.
Happily, James found a loan to suit him and his family’s budget and even managed to roll the credit card debt into the loan, thus lowering the interest rate on that part of his debt.
The craziest part of James’s story is that ‘shopping around’ only took him a few minutes! A well invested few minutes for sure!