When you already have a car loan, taking out another loan for a motorbike can mean managing two separate repayments, two finance agreements and another monthly commitment.
For this client, that was exactly what she wanted to avoid.
She wanted to purchase a motorbike, but rather than adding a second loan to her existing commitments, we looked at whether refinancing her current car loan could provide a better solution.
By refinancing and extending the existing loan term, we were able to incorporate the additional funding required for the motorbike into one finance arrangement.
The client already had finance on her car and was happy with the vehicle. Her goal was simply to add a motorbike without creating another separate loan.
Taking out a new motorbike loan would have meant another monthly repayment on top of her existing car finance.
Instead, we looked at her current finance position and considered whether refinancing the existing loan could achieve what she wanted.
The objective was simple:
Rather than leaving the existing car loan in place and adding another finance agreement, we refinanced the current loan.
The new finance was structured to incorporate the existing car loan balance along with the additional amount required for the motorbike.
The loan term was also extended, helping spread the combined balance over a longer period.
This meant the client could finance both assets under one loan rather than managing separate car and motorbike repayments.
Extending a loan term can be useful when the priority is managing the size of the regular repayment.
By spreading the finance over a longer period, the combined loan can have a more manageable monthly repayment than taking on an entirely separate loan for the motorbike.
However, extending a loan term can also mean paying interest over a longer period. This is why refinancing should not be based solely on the monthly repayment.
It is important to consider:
The right structure depends on your circumstances and what you are trying to achieve.
For this client, one of the key benefits was simplicity.
Instead of having:
Existing car loan + separate motorbike loan = two repayments
the refinance created:
One refinanced loan covering both = one repayment
Having one finance agreement can make it easier to manage repayments and keep track of your overall vehicle finance.
It does not necessarily mean the refinance will be cheaper overall, which is why comparing the complete loan structure is important.
Refinancing may be worth considering when your circumstances or financial goals have changed since you first took out your vehicle finance.
You may want to explore refinancing if you are:
It is important to remember that refinancing is not automatically the best option. The new loan needs to make sense when you consider the interest rate, fees, loan term and overall cost.
In some circumstances, refinancing an existing vehicle loan may provide an alternative to taking out a separate motorbike loan.
However, whether this is possible depends on factors such as your current loan, outstanding balance, vehicle value, income, credit profile and lender criteria.
A broker can assess your existing finance and compare potential refinancing options to determine whether restructuring the loan makes sense.
Depending on your circumstances and lender criteria, refinancing an existing car loan may allow you to access additional funds for another asset such as a motorbike.
Potentially. If suitable, refinancing may allow your existing car loan and additional motorbike funding to be combined into one new finance agreement.
It can reduce the regular repayment by spreading the balance over a longer period. However, extending the loan term can also increase the total interest paid over the life of the loan.
Not necessarily. The best option depends on the interest rate, fees, remaining balance, new loan term and total cost of each option.
In many cases, yes. The existing loan balance can potentially be incorporated into a new finance arrangement, subject to lender criteria and your financial position.
Buying another asset does not necessarily mean adding another finance agreement to your monthly budget.
For this client, refinancing her existing car loan allowed her to access the funds needed for a motorbike while avoiding a separate second loan. By extending the existing finance term, we were able to create a structure that better suited what she was trying to achieve.
The important takeaway is that your existing finance does not have to be viewed in isolation. When your circumstances change, it can be worth reviewing your current loan and seeing whether there is a more suitable way to structure your finance.
If you're considering a motorbike purchase but don't want another separate repayment, refinancing your existing vehicle finance could be worth exploring. Contact us for tailored support.
