Car Loan Refinance
Looking to switch to a better car loan? We’re here to help. Find and compare from the top vehicle financiers around Australia.
Refinance your car loan with RoadLoans
When paying off your car loan, it’s still important to keep one eye on the market for new and improved offers from lenders across the country. Just because the interest rate you received two years ago was the best at the time doesn’t mean that remains the case today. That’s where RoadLoans can help.
With a wide range of financiers counted amongst our panel, our team of friendly and dedicated consultants is here to do the hard work for you and find the best car loan for you to switch to. You can save hundreds of dollars, if not more, by locking in a lower rate and fees on your loan. Get the wheels in motion with a quick quote today.
Online and convenient process
You can apply for your next car loan from the comfort of your home with our fast and simple online application.
More choice, more savings
We count over 25 reputable lenders amongst our panel, with more options increasing your chances of finding a great deal.
Have the hard work done for you
Your consultant will compare all the top offers for you and help prepare your application to maximise your approval chances.
The process of refinancing your car loan with RoadLoans
Assess your current loan and get a quote
Once you decide it’s time to switch to a new loan, you can complete a quote and submit an initial application to allow us to assess your profile and situation.
Speak with your consultant about your options
Your consultant will compare a variety of options from our panel of lenders before reaching out to confirm the cheapest and best option with you.
Sit back and have your application prepared
From there, your consultant will do the heavy lifting, tailoring your application to meet your lender’s criteria to help you receive formal approval not long after.
Sign your new contract and close your old loan
Once you sign and return your contract, you can receive your funds to pay out your existing loan and begin your new loan’s repayments shortly thereafter.
The pros and cons of refinancing your car loan
PROS
Take advantage of lower interest rates and fees
By switching to a loan with a lower interest rate and lower or no ongoing fees, you can significantly cut down on the overall cost of your loan across your term.
Adjust the length of your loan term
You can refinance your debt to either shorten your term to pay it off sooner or extend it to give you some more breathing room when other expenses are rising around you.
Access additional features
Refinancing to a car loan which allows for free additional payments could help you clear your debts ahead of schedule, while a redraw gives you the freedom to access those additional payments.
CONS
Could attract high early repayment fees
Car loans will often come with fees for early repayment, which can cost hundreds of dollars and potentially outweigh the benefit of switching in the first place.
Pay setup fees again
As part of the process of setting up your new loan, you may be required to pay an establishment fee once again, which could cost up to $700 in some cases.
Car loan refinancing explained
When should I refinance my car loan?
There are several situations where you might wish to refinance your car loan. Before doing so, though, it’s important to weigh up the benefits of switching to a new loan and lender. Some of the reasons for looking to refinance your car loan include:
Securing a lower interest rate and fees
Even small differences in rates and fees can result in you paying a substantial amount more over the life of your agreement, particularly if you’re refinancing a large loan amount. Lenders are frequently offering lower rates and special deals which you can take advantage of, so you might not want to miss out. Additionally, if your financial situation wasn’t perfect when you took out the loan and has since improved, you might be able to qualify for a cheaper loan than when you first applied.
Reducing your repayments and stretching out your loan term
You might find yourself in a position midway through your loan term where you’re looking to free up funds to spend elsewhere, such as to put towards a property purchase, home improvements and renovations or simply to ease the burden with other mounting expenses. By refinancing your outstanding loan debt but arranging to pay it over an extra year or two, you can reduce your weekly, fortnightly or monthly financial commitments while paying off the same debt (although doing so will likely increase your interest outlay).
Cutting down your original term to increase your savings
Conversely, if you’re now in a position where you have more funds available, such as having more debts paid off or receiving a higher salary, you might want to have your debt cleared sooner and minimise the cost of your loan. In the same way as lengthening your loan, you can apply with RoadLoans and arrange for your existing debt to be repaid over a different, shorter term.
Removing a co-borrower or guarantor from your loan
If you originally applied with a guarantor or co-borrower to allow to get approved when you otherwise may not have but are now able to support your repayments on your own, you can apply for a new loan where neither are listed as part of the agreement. Of course, you’ll need to show your new lender that you’re earning enough to support the repayments on your own and have the discipline to do so without the help of a partner.
Gaining access to more features
Not all loans and lenders will afford access to the same number of features. While most car finance deals are similar in structure, you may find some which offer free additional repayments throughout their term (although early repayment fees may still apply), while select others will allow you to access any additional repayments you may have made via a redraw facility should you need them down the line. If you want to take advantage of features such as these, you may wish to apply for a loan refinance.
How much can I save when refinancing my car loan?
The amount you’ll save will ultimately depend on a variety of factors such as the size of your car loan, your current and future interest rates and fees, your term remaining and the cost of your early repayment fee. The table below demonstrates the difference between refinancing your outstanding $30,000 car loan debt with three years remaining on a five-year term at 7.5% p.a.
| Car loan | Interest rate | Monthly fees | Early repayment fee | Monthly repayment | Total three-year cost |
|---|---|---|---|---|---|
| No refinance | 7.5% p.a. | $10 per month | $0 | $943.19 | $33,954.72 |
| Refinanced loan | 6.5% p.a. | $5 per month | $200 | $924.47 | $33,480.92 |
As can be seen from the table above, switching to a loan with a lower rate and fees, even with a $200 early repayment fee, will save you almost $475 in total. The cost of your loan can also be impacted by the term you choose to go with. Using the same example, you can see how much you can save by switching to a shorter term (even at the same 7.5% p.a. rate and $10 monthly fee) in the table below:
| Car loan | Loan term | Early repayment fee | Monthly repayment | Total three-year cost |
|---|---|---|---|---|
| No refinance | Three years | $0 | $943.19 | $33,954.72 |
| Refinanced loan | Two years | $200 | $1,359.99 | $32,959.71 |