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Can you pay off your car loan early?

Find out if you can save time and money by repaying your car loan early.

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Elizabeth Barry

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Car loans generally require you to make repayments over a set period of time. However, some may allow you to make additional repayments or pay off your entire loan early. If you're considering a car loan and want the ability to pay it off early, read our guide to see which loans allow you to do so.

Which car loans allow early repayment?

BrandCar loan(s)Can you repay early without penalty?Fees that apply
AussieAussie Car LoanNoFees are determined by the lender. The amount will depend on how much you have left on your loan term and how much you still owe.
BankwestBankwest Car LoanNotransparent--green-tickAn early repayment fee applies if the loan is paid off in the first 24 months.
BankSABankSA Secured Personal LoanNo$150 if paid off within first 12 months, $100 if paid off after first the first 12 months and before the end of the term. Break costs also apply as determined by BankSA.
Bendigo BankBendigo Bank Secured Car LoanNo$20 fee for paying your loan back early.
Beyond BankBeyond Bank Special Low Rate, Low Rate, Fee Free and Flexi Car Loantransparent--green-tickNo fee applies.
CommBankCommBank Secured Car LoanNoYou will be charged an early repayment adjustment if you repay your loan early.
CUACUA Fixed Rate Car Loantransparent--green-tickNo fee applies.
EsandaEsanda Car LoanNo$50 administration fee plus $680 pro rata for unrecovered costs of providing the loan. Break costs may also apply.
Gateway BankGateway Bank New Car Loan, Car up to 5 years and over 5 yearstransparent--green-tickNo fee applies.
IMBIMB New Car Loan, IMB Secured Personal Loantransparent--green-tickNo fee applies.
loans.com.auloans.com.au Car Loantransparent--green-tickEarly repayment fee applies if the loan is paid off before the last 12 months of the loan term.
NRMANRMA Car LoanNo$200 or 2% of the outstanding balance (whichever the greater) at the time the final payment is made. Applies for the first 75% of the original loan term only.
RACQRACQ Car LoanNotransparent--green-tick2% or minimum $200 if paid before 75% of the loan term, otherwise $0.
RACVRACV Car LoanNoThe fee is $160 or 1.25% of your remaining loan amount, whichever is greater.
WestpacWestpac Car LoanNotransparent--green-tick$175 fee applies if you choose a term greater than 2 years and pay it out in less than 2 years. This fee is waived if you pay out your car loan by refinancing to another Westpac personal loan.

How do early repayments work?

There are a few different types of early repayments:

  • Additional or lump sum payments. These are made during the loan term and do not result in your loan being repaid in full. Lenders still may place restrictions on these payments, especially with fixed rate loans. On variable rate loans, you will find fewer restrictions and you may also be able to redraw additional payments using a redraw facility.
  • Repaying your entire loan on a variable rate loan. You will find fewer restrictions with a variable rate loan on repaying your entire loan amount before the end of the loan term. In this situation, you repay the loan balance on a variable rate loan or you will be out of your fixed rate period. Break fees are not likely to apply as lenders do not lose as much from letting you repay early.
  • Repaying your entire loan amount during a fixed rate period. This is where you will find the most restrictions applied. Repaying your entire loan early in this scenario involves paying whatever the loan balance is due to the lender during a fixed rate period, or where a fixed rate already applies to a loan. Here, break costs and administration fees are likely to apply to help the lender cover costs lost to them.

What is the benefit of paying your loan off early?

Repaying your car loan early can help lower the cost of your loan by limiting the amount of interest you pay. However, if you are in a position to repay your car loan early, you should always consider if any penalties or fees will apply, as the cost of these may be bigger than the savings you would make from repaying the loan early.

What else should I know about car loan repayments?

Your car loan repayments will affect how you deal with your loan, so examine them carefully. Before you send through an application, make sure you have considered:

  • How often you make repayments. Lenders usually give you the option of making weekly, fortnightly or monthly repayments. This lets you line them up with your budget.
  • The flexibility of the repayment options. Check whether you are able to make additional repayments without penalty or if there is a cap on how many additional payments you can make.
  • How you need to make repayments. Repayments are usually direct debited out of your account automatically, but you may be given other options to pay off your loan. BPAY, electronic transfer and even in-branch deposits may be available.

Making additional repayments on your car loan can be a helpful option that can help you save down the track, but it's not the only feature that lenders have on offer. Remember to compare car loans across all fees, features and rates to find the right one for you.

Compare car loans

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Name Interest Rate (p.a.) Comp. Rate (p.a.) Application Fee Monthly Fee Monthly Repayment
loans.com.au - New - Variable Rate Special
Variable3 - 7 Years $5,000 - $150,000
Interest Rate (p.a.)
6.24%
to 7.74%
Comp. Rate (p.a.)
7.36%
to 8.85%
Application Fee
$400
Monthly Fee
$8
Monthly Repayment
$630.83
Go to siteMore Info
OurMoneyMarket New Car Loan
Fixed1 - 7 Years $2,001 - $75,000
Interest Rate (p.a.)
6.57%
to 18.99%
Comp. Rate (p.a.)
7.19%
to 21.78%
Application Fee
$250
min.
Monthly Fee
$0
Monthly Repayment
$622.82
Go to siteMore Info
Stratton Finance New Car Loan
Fixed1 - 7 Years $10,000 - $300,000
Interest Rate (p.a.)
6.52%
to 18%
Comp. Rate (p.a.)
6.95%
to 23%
Application Fee
$395
Monthly Fee
$0
Monthly Repayment
$625.27
Go to siteMore Info
You'll receive a fixed rate from 6.52% p.a. depending on the lender you are approved with.
Apply for up to $300,000 and use cash or trade in a vehicle to use as a deposit. Optional balloon payment available.
NRMA New Car Loan
Fixed1 - 7 Years $5,000 - $130,000
Interest Rate (p.a.)
7.29%
to 16.99%
Comp. Rate (p.a.)
8%
to 17.77%
Application Fee
$499
Monthly Fee
$0
Monthly Repayment
$635.67
Go to siteMore Info
Note: Take out a loan for an eligible electric vehicle and receive a 1.5% discount on your personalised interest rate (interest rates start from 5.79% p.a. and comparison rates from 6.49% p.a.)
OurMoneyMarket Used Car Loan - No Vehicle Age Limit
Fixed1 - 7 Years $2,001 - $75,000
Interest Rate (p.a.)
6.57%
to 18.99%
Comp. Rate (p.a.)
7.19%
to 21.78%
Application Fee
$250
min.
Monthly Fee
$0
Monthly Repayment
$622.82
Go to siteMore Info
NRMA Used Car Loan
Fixed1 - 7 Years $5,000 - $130,000
Interest Rate (p.a.)
8.49%
to 16.99%
Comp. Rate (p.a.)
9.21%
to 17.77%
Application Fee
$499
Monthly Fee
$0
Monthly Repayment
$647.01
Go to siteMore Info
You'll receive a fixed rate from 8.49% p.a.
Finance a used car with NRMA and benefit from a fixed rate term and no monthly fees. Pre-approval available within 5 business hours.
loans.com.au - Variable Rate Used Car < 5 years
Variable3 - 7 Years $5,000 - $150,000
Interest Rate (p.a.)
7.74%
to 7.74%
Comp. Rate (p.a.)
8.85%
to 8.99%
Application Fee
$400
Monthly Fee
$8
Monthly Repayment
$644.82
Go to siteMore Info
Stratton Finance Used Car Loan
Fixed1 - 7 Years $10,000 - $300,000
Interest Rate (p.a.)
6.52%
to 18%
Comp. Rate (p.a.)
6.95%
to 23%
Application Fee
$395
Monthly Fee
$0
Monthly Repayment
$625.27
Go to siteMore Info
You'll receive a fixed rate loan from 6.52% p.a. with a comparison rate of 6.95% p.a.
A used car loan of up to $300,000 with quick approval times and balloon payment options.
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2 Responses

    Default Gravatar
    OliverOctober 9, 2017

    Hi I’ve just paid off my car loan three years earlier and now I received final payment paperwork with a admin fees add in to it and it’s over $500.00.my question is; was I supposed to pay that admin fee when I pay my loan off early?

    Reply
      Default Gravatar
      DanielleOctober 10, 2017

      Hi Oliver,

      Thank you for contacting finder. We are a comparison website and general information service, we’re more than happy to offer general advice.

      That would depend on your lender. As you can see on the table above, different lenders have different policies. You may review your loan policy or contact your lender directly to verify.

      I hope this helps.

      Cheers,
      Danielle

      Reply
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