RateCity.com.au
powering smart financial decisions
RateCity.com.au

Loan amount

$

Loan term

Credit score

Don't know your score? Find it out here.

Type of car

Show Online Partners Only?

We provide links to our Online Partners. If you click through to an Online Partner, you can get more product information, apply for or purchase the product and RateCity may earn a fee for referring you. This is one of the ways RateCity makes money and how we can offer our comparison service to you for free. See how we make money for more.

Sort by

Default
Product

Green Car Loan

Real Time Rating™

3.83

/ 5
Interest Rate

From

3.39

% p.a

Fixed

Comparison Rate*

4.89

% p.a

Company
Monthly repayment

$544

Loan amount

$10k to $150k

Total repayments
Real Time Rating™

3.83

/ 5
Go to site
Product

Used Car Loan

Real Time Rating™

3.47

/ 5
Interest Rate

From

3.89

% p.a

Fixed

Comparison Rate*

4.60

% p.a

Company
Monthly repayment

$551

Loan amount

$10k to $150k

Total repayments
Real Time Rating™

3.47

/ 5
Go to site
Product

New Car Loan

Real Time Rating™

3.57

/ 5
Interest Rate

From

3.69

% p.a

Fixed

Comparison Rate*

4.40

% p.a

Company
Monthly repayment

$548

Loan amount

$10k to $150k

Total repayments
Real Time Rating™

3.57

/ 5
Go to site
Product

Green Loan

Real Time Rating™

3.94

/ 5
Interest Rate

3.99

% p.a

Variable

Comparison Rate*

4.63

% p.a

Company
Monthly repayment

$552

Loan amount

$10k to $100k

Total repayments
Real Time Rating™

3.94

/ 5
Go to site
Product

Used Car Loan

Real Time Rating™

3.43

/ 5
Interest Rate

From

3.99

% p.a

Fixed

Comparison Rate*

5.40

% p.a

Company
Monthly repayment

$552

Loan amount

$10k to $250k

Total repayments
Real Time Rating™

3.43

/ 5
Go to site

Embed

Can you refinance a car loan?

Yes, it is possible to refinance a car loan. Car refinancing is often about getting a better deal than your existing loan - one that offers a lower interest rate, reduced fees or different loan terms that better suit your needs. Refinancing could save you hundreds, or even thousands, of dollars, depending on how much you've borrowed.

Most people in Australia typically refinance a car loan with a new lender but refinancing with your current provider is also possible.    

Is it easy to refinance a car loan in Australia?

Refinancing a car loan in Australia is fairly straightforward and involves a similar process to applying for an initial car loan.

Here’s how car loan refinancing works: A borrower with an existing car loan submits an application for a new car loan of their choosing. Once approved, they will use that money to pay off the initial car loan with their current lender, then start making repayments on the new loan.

Why do people refinance car loans?

There are many reasons why someone might refinance their car loan, especially considering their situation and the financial market has likely changed since they first took out the loan.

People might refinance their current car loan to:

  • Save money: Lower car loan interest rates or fees could mean more cash in your pocket, thanks to cheaper repayments. Additionally, if your credit score has improved since taking out your existing loan, you could access a more competitive rate.
  • Lengthen their car loan term: Extending your loan term could lower your repayments, as each one will be divided by a greater number of months.
  • Manage a balloon payment: Sometimes dealer finance lets you enjoy lower monthly car loan repayments by adding a large balloon payment to the end of your loan term. Instead of paying it all back in one go, refinancing your balloon payment may let you spread your payments out over a longer period of time.
  • Consolidate debt: Refinancing your car loan along with other existing loans or credit cards could allow you to keep all your debt in one place, offering you better control of your finances.
  • Remove a co-borrower: When you refinance a car loan, you'll have the option to remove a current co-borrower. If the co-borrower has a lower credit score than you, this could help you get a better interest rate. Keep in mind, there are factors other than credit scores that also determine the interest rate you may be eligible for.
  • Get more bang for your buck: Refinancing a car loan could help you access more benefits than your existing loan, such as flexibility to make extra repayments or the option to redraw money when you need it.
  • Switch lenders: If, for whatever reason, you find it difficult to deal with the lender your current loan is under, you may be able to opt for a new one that suits you better.

How much could you save by refinancing a car loan?

The potential savings you could make when you refinance your car depends on how your current and new loan differ in terms of their interest rates and ongoing fees. The amount it will cost you to exit the previous loan and establish the new one also comes into play here.

Further to this, your loan term can impact how much you save over the life of the loan. Let’s say your initial loan amount is on a five-year term, and you're three years into that term—taking out a new loan on a two-year term would be wise as you would still be paying off your loan over a total of five years. On the other hand, if you were to switch to another five-year term after already having paid off three years of your initial loan, you'd be increasing the time spent paying off your loan to eight years, which will likely mean paying more in interest charges over time, despite a lower interest rate.

Want to work out how much you could be saving on your monthly repayments by refinancing your car loan? Consider using our refinance car loan calculator: RateCity's Car Loan Switch & Save Calculator. All you have to do is enter the amount still owing on your existing car loan in the ‘I want to borrow’ field, along with the number of years remaining on your existing loan term and the interest rate offered by your preferred new loan provider.

Find out how much repayments could cost on a new car loan

Compare and save using our Car Loan Calculator

Calculate what your repayments could be on your car loan.

I want to borrow

$

Loan term

years

With an interest rate of

%

Can you refinance your car loan to access more money?

You may be able to access more money by refinancing your car loan but it's worth considering the added costs involved in doing this.

Here are some alternatives to accessing more money:

  • Credit card: Activating a credit card means you can pay for individual goods and services with borrowed money, instead of taking out a lump sum. Credit cards typically come with higher interest rates than car loans and personal loans, but may offer more flexibility.
  • Personal loan: A personal loan allows you to access extra cash for you to use as you wish - whether that’s to consolidate a debt, go on a holiday or improve your home. When considering a personal loan, make sure you meet the eligibility criteria and understand the terms before you apply.
  • No Interest Loans Scheme (NILS): This scheme offers people on low incomes safe and affordable access to credit (usually up to $1,500) for essential goods and services.
  • Financial counselling: Financial counsellors are able to provide advice and support when it comes to bills and debt. Chatting to a counsellor could help you manage your savings and pay off your debts quicker.

What are the main features to consider when refinancing a car loan?

The factors to consider when refinancing a car are similar to taking out a car loan for the first time. They include:

Interest rate: This may be set at a fixed interest rate that keeps car loan repayments consistent, or a variable rate that has the potential to rise or fall as the market changes.

Comparison rate: This is an estimate of your car loan's overall cost, including interest charges and standard fees.

Fees: Incurred at the lender’s discretion, these commonly include upfront application fees, establishment fees and early repayment fees. You may find that you need to pay fees to use certain features, such as a redraw facility or paying off the loan early.

Security: Secured car loans use the car's value to guarantee the loan, which can mean lower rates of interest. Unsecured car loans may be more flexible; however, their interest rates are usually higher.

Loan term: This is the period of time you have to pay back your loan. While extending your loan term can lower individual repayments, it can also increase the total amount you pay in interest charges as you are paying down the loan’s balance at a slower rate.

Additional repayments: Some lenders let you pay extra onto your loan when you can afford it, which can reduce interest and bring you closer to exiting the loan early.

Redraw facility: Car loans that let you make additional repayments may also let you redraw money from your loan when you're ahead on your repayments, which can come in handy if you need some extra cash.

What are the pros and cons of refinancing a car loan?

Refinancing a car loan has its benefits and drawbacks, as outlined below.

  • Lower repayments: Switching to a new car loan with a lower interest rate or fewer fees may make your monthly repayments more affordable.
  • Better loan features: The right features could increase the flexibility of your new car loan, making it easier to pay off.
  • Better service: Different lenders offering better customer service or more convenient options could make managing your loan easier.
  • Pay more interest over a longer term: If you refinance to a car loan with a lengthier loan term, your repayments may be cheaper, but your loan will take longer to clear, so you may pay more in total interest charges than on a shorter term loan.
  • Switching costs: The cost of exit fees for leaving your old car loan, and/or establishment fees for your new car loan, could make refinancing less cost-effective when considering the total cost of the loan.
  • Car age/model may limit available loan types: Some secured car loans may be limited to newer cars whose value can cover the loan. Refinancing to an unsecured loan for an older car could result in a higher interest rate.

How do you refinance a car loan?

Australian car refinancing is pretty straightforward. Below are the seven steps you need to take to be on your way to securing the best refinanced car loan for your needs.

  1. Compare your loan options: The research stage is arguably one of the most important steps in refinancing a car loan because it allows you to find one that has the features you want and that may save you some cash. You can narrow down your search with the filters on RateCity's car loan comparison tables, like the one on this page.
  2. Do your calculations: The core of refinancing a car loan is to save money. A useful tool to help you determine the potential savings that come with a new car loan is with a refinance car loan calculator. RateCity's Car Loan Switch & Save Calculator can provide you with a repayment estimate for your preferred loan products, making it easy to compare against your current repayments.
  3. Check your eligibility and fees: It’s important to make sure you meet the eligibility criteria, and are aware of all fees and charges (upfront and ongoing) that will apply to your new car loan, before you apply.
  4. Check your credit score:Your credit score may have changed since taking out your existing loan, so it’s a good idea to check where it’s at. If it has improved, you might be able to access a more competitive rate. You can use RateCity’s free credit score checker to assess whether you've got excellent credit, good credit or bad credit.
  5. Prepare your application: Decided which loan you want to switch to? Now it’s time to start the application process. At this stage, you'll need to submit relevant documentation and information - this usually includes details about your current lender and your car. Whether you bought a new car or used car back when you got the original loan is important, as the age of a vehicle is a key factor in this type of financial service.
  6. Await approval: Once you've submitted all the necessary information, you’ll have to wait for a response from the lender. This may take a few hours or a few days.
  7. Begin paying off your old loan and new loan: Once the loan has been approved and the funds are in your account, the final step is to pay off your old loan (this will be up to you or the lender) and then begin making payments on your new one. Make sure your account with your previous lender has been closed once you’ve paid off your old loan. It’s also wise to keep a tab of your repayment track record to ensure all your repayments are being fulfilled as required.

When can you refinance a car loan?

Before you refinance a car loan, you should consider the exit fees you may incur for leaving your existing loan and entering a new one. How much you are charged for leaving your loan early will differ from lender to lender, while some waive exit fees in the last 12 months of the loan, so be sure to check your lenders policies so you know what to expect.

It’s also worth considering how close you are to the end of your loan term. This is because if you’re near the end, any money that you could save on interest or ongoing fees might outweigh the costs associated with establishing a new loan. Even if there’s potential to save a small amount of money, it’s worth weighing that up with the time and effort of refinancing to decide if it’s a viable move for you.

Where can I get a student car loan?

Student car loans are not a necessarily a product in and of themselves, but what you may be looking for is a guarantor car loan.

A guarantor car loan has a third-party act as a form of guarantee for your loan application, telling the bank or lender that if you default on your loan, someone will pay the loan repayments.

Going guarantor on a car loan is no new thing, and before internet-based credit scores, guarantor car loan applicants would apply for loans with a guarantor or property owner who could vouch for the person borrowing the loan.

To get a guarantor car loan, you’ll need someone willing to act as a guarantor for your car loan.

What is a secured car loan?

A secured car loan is a loan that is connected to a form of security, or collateral. Generally, the security for a car loan is the car itself. If you fail to repay the loan, the lender might seize your car, sell it and then use the proceeds to recover their debt.

What is a guarantor car loan?

A guarantor car loan is a type of loan that features a guarantor on the agreement. The guarantor is a third-party individual, often a friend or relative, who guarantees the loan will be repaid if the borrower defaults on the car loan.

Guarantor car loans are often geared at people who might otherwise struggle being accepted for a secured car loan when purchasing a vehicle. Some of the reasons might include a lack of credit history such as with a student or young person, if there’s bad credit, or age as a factor such as with pensioners.

How to find a great car loan

Historically, finding a great car loan would require excess research ranging from visiting an excess of websites or making phone calls, but technology has moved on. Using RateCity, Australia’s leading financial comparison service, you can check out great deals from a range of lenders on the one site.

To start, select the amount you want to borrow and the length of the loan, narrowing your search to show just fixed or variable interest rate results.

Once you’ve indicated your search criteria, you’ll see an immediate list of lenders, ranked by interest rate or application fees. You’ll also be able to view the monthly repayment amount for each result, helping you to know what you can afford.

Up to six products can be compared side-by-side, complete with more information about each car loan, giving you more information about your options.

When comparing your car loan options, it’s ideal to keep in mind some points find a great car loan for your needs. Consider the following:

  • Choosing a low interest car loan can reduce costs
  • Selecting an option with low fees and charges is ideal, because these can really add up
  • Be aware of penalties, such as early exit penalties if you pay off the loan sooner than expected
  • Consider the features that best suit your situation

There are many ways to ensure that you get a great car loan. Ultimately, you’ll end up with the best deal by doing your research and selecting the most suitable product for you.

What is a loan term?

The loan term is the amount of time the lender gives you to repay the car loan. For example, if you take out a $20,000 car loan with a five-year loan term, you would be expected to pay off the entire $20,000 (plus interest) within five years.

This article was reviewed by Personal Finance Editor Georgia Brown before it was published as part of RateCity's Fact Check process.

Did you find this page helpful?