Refinance Calculator – Get The Best Possible Loan

The refinancing concept can be difficult to grasp; make the process easier by utilising a refinance calculator.

In the wake of the pandemic, refinancing rates have been on the rise, particularly for mortgage loans. But why? What are the advantages of refinancing? And how can no credit check loans and cash loans help you? Consider how you might be able to save yourself time and money by refinancing. More importantly, consider what a refinance calculator may be able to help you with throughout this process.

Please note that specific ideas and products presented in this article may not be on offer by Monzi or the lenders we work with. This article presents only general information. Consider seeking professional financial, taxation, legal or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

What is refinancing?

If you like to ensure that you get the best deal out of your loans, you may have heard of refinancing. Refinancing is the practice of taking a new loan to repay an existing loan. Ideally, the new loan you take should be better, in some form, than your current loan. You can technically refinance any loan you like; however, it is more common to refinance a large loan such as a mortgage loan.

The most crucial part of deciding to refinance is ensuring that the deal you take will be better than the current loan terms you have. This can be tricky as multiple factors combine to create your complete loan terms. This is where a refinance calculator can help. Refinance calculators may help you see multiple aspects of your potential new loan, making it easier to compare with your current loan.

What is a refinance calculator?

You can find a refinance calculator for free online via several sites. It is quite common for larger financial institutions to offer such a calculator to entice you to use their services. This does not mean you have to do so if you already have a lender in mind that you would like to opt with. Or, if this financial institution is not offering the best deal.

Essentially, the best type of refinance calculator allows you to input the information from your existing loan and for your new loan. This then allows you to compare your options even more succinctly. These calculators will typically ask you for the following:

  • Your loan type, is it fixed or variable?
  • The interest rate in percentages
  • Your loan amount
  • The Loan term

Once you do so, it should show you your existing loan’s total repayments and your new loan’s total repayments. Some calculators may outright show you the amount of interest you could potentially save. Alternatively, you may get an end of year breakdown for each year remaining in your loan term. Remember that these are just estimations, and it may not be smart to interpret them as definite. If you like the proposed savings a refinance calculator shows you, consider speaking to a lender for more concise information about refinancing potential.

What are some reasons you might want to refinance?

There are several reasons you may want to refinance your loan. Some of the most plausible reasons, however, include:

  1. You want to change loan types. Maybe your loan is currently fixed, and you want it to be variable to – ideally – save you some money, or vice versa.
  2. Maybe you are paying too much interest. Perhaps you have found a lender offering a lower loan-to-value ratio (LVR), resulting in lower rates.
  3. You have improved your credit score – congratulations! A higher score may mean your lender will potentially consider offering you a lower rate.
  4. There are debts you need to consolidate. If you have debts stacking up and are struggling to manage them individually, taking a larger loan may help you roll them all into one.This can also be useful if you have loans for people on Centrelink.
  5. Your situation has changed considerably. Just had a baby? Maybe you got a divorce? Refinancing can accommodate these life changes in some instances.
  6. There are practical reasons you need extra money. Planning home renovations? Refinancing for a larger loan may help you get this done.
  7. Bad customer service. If you can’t stand your current lender, refinancing for a new one can be justified.

Your motivations may vary depending on your current circumstances. However, if you feel that one or more of the above apply to you, it may be worth using a refinance calculator to see what positive changes you can make.

When might you want to refinance?

Just as there are multiple reasons you might want to refinance your loan, there are also certain times in life where it may be better to refinance than others. These could include significant family events such as having another child, needing more space as your family grows or less as it shrinks. In other, less happy events, perhaps you have divorced or have lost a partner and need to refinance so your loan is more manageable alone.

Another reason to refinance, if you have a joint personal loan, is to change the name of the second person on your loan. The only way to take a person off, or add a person onto, a loan contract is to refinance. If you do have to do this, it may be smart to also look for a better deal while you are doing so. Consider a refinance calculator when undertaking this process for a visual of where you are at.

Advanced refinance calculator

If you feel that a refinance calculator is beneficial to you but want some more information before beginning the journey, there is a way. You can search for an advanced refinance calculator. An advanced refinance calculator will offer you all the same information as a regular refinance calculator. However, it may also ask you for:

  • Your original loan date
  • The closing costs on your new loan
  • If you are taking cash out
  • How you intend to pay the closing costs

These calculators are usually only for more complicated loans such as mortgages. This is as small loans are typically simpler and easier to refinance. This type of refinance calculator can also tell you:

  • The monthly payment
  • Your payoff date

The calculator can show this for both your current and future loan amount, term and interest rate. It doesn’t offer you a huge amount of extra information; however, it may offer you some extra peace of mind.

Pros and cons of refinancing

There are multiple types of loans that you can refinance. Across the board, however, there are pros and cons to various types of loans. Some of these are as follows:

Advantages

The pros of home loan refinancing are slightly more obvious such as a lower interest rate and a reduced loan term. However, other positives can also include allowing you to access your equity if it is a mortgage loan. This means that if you have already repaid a significant amount of your loan, you can use the equity instead of more cash. Alternatively, you may be able to take advantage of extra features. Perhaps you want the redraw facilities or offset accounts. Or, maybe you want to change your loan type from fixed to variable or vice versa to move with the times.

Disadvantages

Most of the cons of refinancing come in the form of extra fees. Lenders mortgage insurance (LMI) is attached to all home loans, and you will always have to pay it unless you perhaps have enough equity to lower your LVR. LMI needs to be paid upfront, so don’t neglect this cost. Then, you may find application fees, valuations fees, or loan break fees across all loan types. The lender you opt with may also present their pros or cons. For example, opting to refinance through a private lender may lead to better customer service than you may receive from a large financial institution.

Mortgage refinance calculator

Typically, the most common reason you may turn to a refinance calculator is for a mortgage. This is because mortgage loans are generally quite large and have many more components to consider than personal loans do. Also, considering home loans can have terms of around 30 years in some circumstances, refinancing could save you some serious cash in the long term.

What a mortgage refinance calculator may not tell you, however, is that several hidden fees will come with your refinance. Whether it’s LMI – a fee to protect your lender – or various application or valuation fees. These costs will vary according to your lender and how far you are into your existing loan. Keep this in mind when you refinance to avoid nasty surprises.

Personal loan refinance calculator

You can refinance your personal loans if you wish to. However, this is often less common as most people take small personal loans. Meaning that there is little to no point in changing your loan as it is short term. However, one great use for personal loans is debt consolidation. This is where you take large personal loans to allow you to repay all your little loans. You might do this because you are struggling to keep on top of multiple repayments. Debt consolidation gives you one term, one sum, and one rate to focus on. You can also consolidate with a mortgage loan.

However, if you are looking to take fast loans for refinancing or consolidating, or even just as an initial loan, Monzi may be able to help. The Monzi lender-finder can help you painlessly find a lender for private loans so that you can get quick loans now, potentially in as little as 60 minutes.

Car loan refinance calculator

Other loans you may consider refinancing include any car loans that you may have. However, refinancing your car loan should be carefully thought out. The issue with car loans, in general, is that cars depreciate, meaning you could end up repaying a lot more than your car’s value. This does mean, however, that you should weigh the pros and cons of refinancing to save money on an ‘asset’ that is already losing its value – particularly if you bought a car new.

However, consider that you can use a personal loan to refinance your car loan if you are not happy with what an actual car loan offers you. You can then use a personal loan refinance calculator if you struggle to find a specific car loan refinance calculator. However, note that all these calculators are essentially the same, and you may still be able to use them regardless of title. Although, the calculator’s estimates may not align with what your lender says.

Use a refinance calculator

Home improvement refinance calculator

You may not find a specific home improvement refinance calculator. However, if you plan to refinance, you can do so with your renovation in mind. This means that you might refinance your home loan for a larger amount of money so that you can complete your refurbishments.

Provided you qualify to apply for a larger amount, which you should be able to put some of your equity towards if you have it, this is a valid method of funding home improvements. This is perhaps more plausible if you are only planning on renovating a few rooms rather than a full house. However, speak with the lender you intend to refinance with about the possibility of refinancing for more to cover refurbishment costs.

Refinance calculator with extra payments

Perhaps a regular refinance calculator doesn’t consider the fact that you eventually plan to contribute extra payments. Never fear; the extra loan repayments calculator is here. Essentially such a calculator will include all the aspects of a regular refinance calculator, plus the option for contributions.

You can then choose how much extra cash you would like to contribute to your loan per payment and when this will begin. This start indicator is a handy addition to have. This is because you could decide that you know your child will finish school in three years, and when you no longer have school fees to repay, you can reallocate this money to your mortgage. Or, if you are already in the position to begin contributing extra, you can see what this might save you when you refinance. Consider what position you are in financially and whether you can complete your mortgage repayments sooner when refinancing.

How to calculate your refinance loan’s interest?

There is a way to calculate how much loan interest you’ll pay when you refinance, manually, using a formula. However, if you want to know this and the other applicable details when refinancing, it will be much simpler to use a refinance calculator. Not only will it save you time, but it will also help you to identify what you should be looking to refinance for. Doing so will then allow you to go to a loan comparison tool and view all the options that meet your criteria, side by side. These comparison tools are free online and can compare the options available to you. This can give you a visual of the rates, terms, and repayments to help you narrow down your decision and make the best choice.

If you are worried about the legitimacy of a refinance calculator, opt to use the ones supplied by high-status banks for peace of mind. Or speak directly to a lender to receive more information on what your refinance might look like.

Refinancing a second loan

You can refinance as many loans as you like, providing you qualify with your chosen lender. Second loans, particularly mortgages, are usually loans designed to be an investment loan. When you refinance a second loan, you can either do it individually or consolidate both loans.

When it comes to investment properties, each investor may have different methods. It may make more sense for some to keep the loans for each of their properties separate. Either for easy maintenance or because it is far too expensive to consolidate multiple home loans. On the other hand, others may wish to combine them. The bonus with property is that homes can generate equity which you can use in the refinancing process. When it comes to personal loans, consolidating can be very useful.

How much can you borrow to refinance?

As with when you take any other form of loan, how much you can borrow is subject to your lender’s assessment. When it comes to mortgage loans, you can typically only borrow 80% of your LVR unless you find a lender willing to accommodate higher LVR loans. When it comes to refinancing your home, if you are seeking to borrow extra than you require, your equity may help you do so. However, this will be subject to your lender’s assessment.

With personal loans, a similar rule applies. The lenders in the Monzi network, however, can be quite lenient with their approval criteria. This means that even if you have poor credit, you may still receive approval for bad credit loans. This is because Monzi lenders consider several different factors. Not just your credit report. They will also look at your job, your income and expenses, and any outstanding debts. If you wish to use the Monzi lender-finder for debt consolidation, your income and various other aspects could still permit your loan approval even if your credit doesn’t look the best. This varies by lender and how much you are looking to borrow and is not guaranteed. However, you may have more luck with a private lender if you seek consolidation loans for bad credit ratings.

Cash-out refinance

Cash-out refinancing generally occurs on mortgage loans. Essentially it is when you take a new loan on your current home, using its existing equity to borrow a loan larger than what you already owe. The money is sent directly to your bank account rather than using this cash to pay off something else.

Then, as this money is cash, your bank cannot have much say over what you choose to do with it. Much like how you can use a personal loan for whatever you like. Some banks, however, may inquire about how you intend to use this cash before they approve your loan. Common reasons you may want to do this include:

  • Debt consolidation
  • Investment property deposits
  • Margin loans or diversifying shares
  • Home renovations

Rather than using a refinance calculator and refinancing, you could take a personal loan to complete any of the above. Unless, of course, you also intend to refinance your mortgage for a better rate or term.

How do you know if refinancing will be advantageous?

Naturally, you can help yourself work out whether refinancing is a smart idea by using a refinance calculator. But are there any other indicators as to when refinancing may be a good idea? Yes, essentially, the main goal of refinancing is to save yourself money. However, your circumstances may change, meaning you could struggle with your repayments. In this case, refinancing may be advantageous as it may allow you to keep on top of your loan.

Alternatively, you may have realised that given the state of the market, it no longer makes sense to have a fixed-rate loan. You can then refinance to make it variable. This may also be advantageous if you have done the calculations. Keep in mind the additional fees that come with refinancing, break fees, new application fees etc., as they can stack up quickly. Generally, however, any decision you make to refinance should benefit you long term. You may need to reevaluate your options if you work out that refinancing won’t impact, or could negatively impact, your current situation.

Is there much need to refinance personal loans?

The answer to this question depends on your situation. If you have a $2,000 or less loan, then there may be no point in refinancing. This is as you are going to be able to repay it quickly regardless. However, if you are refinancing a personal loan of $10,000 or more, this may make sense. As you could potentially have this loan for quite a long time.

If, for example, you originally took a $3,000 loan because you had average credit, then did some credit repair. You may be able to refinance and access more funds. Alternatively, you could refinance for debt consolidation and roll together multiple smaller loans. Or, you may not be happy with your customer service and seek to refinance to a better lender. It depends on your loan type, how much you are borrowing, and what the future may look like for you.

How soon can you refinance a loan?

Generally, you may not find a better loan deal than the one you currently have, for quite a while after the loan settles. But what if you are offered a much better deal right out of the gates? Well, it depends on your loan type and your lender.

Some lenders may allow you to leave as soon as you like. Other lenders may lock you into your contract for six months. However, you may be unlikely to encounter any better options until a year, or two years, into your loan. Keep in mind also that refinancing soon after loan settlement could impact your credit score.

Are there dangers to refinancing?

As above, refinancing too quickly can potentially create too many credit applications, which may negatively impact your credit report. However, many people also forget that the act of refinancing itself can also be costly. A refinance calculator will not include the additional costs you might incur. Meaning you should take the initiative to investigate what these extra costs may add up to. Then you can factor them into your budget.

Also, note that refinancing to make your repayments more manageable by increasing your loan term, could be a trap. It may result in you paying thousands extra in interest. If you are unsure about whether refinancing will benefit you, the government’s MoneySmart site has an excellent page on debt consolidation and refinancing to help your research.

Monzi and refinancing

Personal loans aren’t always advertised for refinancing. However, if you have used a refinance calculator and want to consolidate your debt, Monzi may help. This is as you can use personal loans for almost anything you like. So, if you search for a lender through our lender-finder, we can help remove the hassle of searching on your own.

All you have to do is click ‘apply now’. Or, scroll up to our loan slider and let us know what you’re looking to borrow. From there, we will only need a few extra details. Then we may be able to help match you to a lender in as little as 60 minutes, potentially setting you up for same day loans.

If you have questions about our process or what Monzi can do for you, don’t hesitate to contact us. You can speak with our friendly team at hello@monzi.com.au for more information.

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You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000

Terms

12 months (minimum)

12 months (maximum)

Costs

20% upfront establishment fee

+ 4% monthly fee

Example

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR) %. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%. The minimum and maximum loan term is 12 months. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Loan amount

$2,001 - $4,600

Terms

13 months (minimum)

24 months (maximum)

Costs

48% Annual Percentage Rate (APR)

67.41% Comparison Rate p.a.

Example

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principal Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

The Annual Percentage Rate (APR) for Secured Medium Loans is 48%. The Typical Comparison Rate is 67.41% p.a. The minimum loan term is 13 months and the maximum loan term is 24 months. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.

Loan amount

$5,000 - $10,000

Terms

13 months (minimum)

24 months (maximum)

Costs

21.24% Annual Percentage Rate (APR)

48% Comparison Rate p.a.

Example

Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principal Amount) + $5,577.12 (Interest) = $15,577.12 total repayable over 24 months with weekly installments of $149.78.

The Annual Percentage Rate (APR) for Secured Large Amount Loans is 48%. Maximum Comparison Rate is 48% p.a. The minimum loan term is 13 months and the maximum loan term is 24 months. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.