Car finance payments can sometimes feel like a big commitment, especially when life changes or unexpected expenses arise. Whether you’re looking for more breathing room in your budget or just trying to make things a little easier, there are several ways you may be able to reduce your monthly car finance payments. Let’s take a look.
First things first: if you are an Oodle customer experiencing financial hardship, please talk to us – Oodle’s payment support team are ready to support you.
Refinancing can be a great way to lower your car finance payments, especially if you’ve seen your credit score improve or if interest rates have dropped since you took out your original finance agreement. By switching to a new agreement with better terms, you could see a noticeable difference in your monthly payments.
Another benefit of refinancing can be owning your car outright. For example, if you have a personal contract purchase or hire purchase finance deal, you won’t legally own the car until the end of the agreement. If you wanted to own your car sooner, you could refinance with an unsecured personal loan – this way you’d own the car from the very first day of your new finance deal.
Key considerations: always compare and contrast interest rates and loan terms from different lenders to make sure you’re get the best possible deal. There may also be charges to consider in the form of early settlement fees, which could have an impact on any potential savings.
If you find yourself with some cash to spare and you're able to overpay on your car finance, this could reduce the total amount you owe and shorten your loan term. Even adding a little extra each month – say £50 – can make a big difference over time. This can save you a significant amount on interest payments and help you pay off the loan sooner. In other words, by paying off the principal (the amount you borrowed) more quickly, you’re charged less interest on the remaining balance over the length of the loan, meaning you’ll pay less overall.
Tip: Check with your lender that they will let you make overpayments and whether they charge any fees.
If you’d like to pay off a chunk of what you owe in one go to reduce your overall balance, this is known as partial settlement. Paying off some of your agreement early will lower the amount of interest you’ll pay overall.
With Oodle, you can make a partial settlement at any time. You’ll need to let us know before you make the payment that you’d like to partially settle. You’ll have the option to either reduce your monthly payments, or to reduce your loan term, meaning your monthly payment stays the same but you’ll finish paying them sooner.
Here at Oodle we are not able to extend the term of your original agreement, but there may be lenders who will let you extend the length of your loan in certain circumstances.
Spreading your payments over a longer period of time reduces the amount of each monthly payment, making them more manageable month to month.
For example, extending a four-year loan to six years could lower your monthly payment from £300 to £250 – giving you a bit more room to breathe financially. However, while your monthly payments are reduced, the overall cost of the loan increases due to extra interest.
Key consideration: It’s important to fully understand how increasing the length of your loan could impact your long-term financial goals. Read more about car finance costs and how they are worked out.
There are several ways you could reduce your car finance payments depending on your lender, whether it’s by extending your loan, refinancing, overpaying, or even considering voluntary termination. Each option has its own benefits and drawbacks, and we know it can be overwhelming to decide what's right for you.
If you’re worried about meeting your monthly payments, it’s important to speak to your lender to find out how they can support you.
At Oodle Car Finance, we’re here to offer tailored support and help you find the best path forward. If you’re struggling to meet your monthly Oodle payments, talk to us. We’ll take the time to understand your individual circumstances and explain the potential outcomes of each option so you can make an informed, confident decision.
