Want to get a better deal on your car loan? Consider refinancing.
Did you know you can refinance your car loan to maximise your savings and reap the benefits of a lower interest rate? The guide below will take you through the ins and outs of refinancing and show you some options to compare.
IMB New Car Loan
IMB New Car Loan
5.89 %
p.a.
fixed rate
6.24 %
p.a.
comparison rate
- No monthly fees
- No early repayment fees
- Borrow up to $75,000
100% confidential application
IMB New Car Loan
A low rate loan to finance new vehicles or cars up to two years old. Borrow up to $75,000.
- Interest rate: 5.89% p.a.
- Comparison rate: 6.24% p.a.
- Interest rate type: Fixed
- Application fee: $250
- Minimum loan amount: $2,000
- Maximum loan amount: $75,000
Car Loans you can refinance with right now
Rates last updated October 16th, 2018
Car loan refinancing options to compare
- Beyond Bank Low Rate Car Loan "Special Offer": 5.97% p.a. comparison rate. A limited time offer - get a car loan with a 5.69% p.a. variable rate.
- RACQ New Car Loan: 6.72% p.a. comparison rate. A car loan suitable for new vehicle purchases with no monthly administration fees.
- imb New Car Loan: 6.24% p.a. comparison rate. A new car loan with no monthly service fees and no early repayment.
- bcu Car Loan: 6.82% p.a. comparison rate. A flexible car loan with redraw facility and fee-free early payout.
Why should I refinance?
If you're still on the fence about refinancing your car loan, here are a few benefits to consider:
- You can reduce your repayments. Better rates and fees may be available and refinancing can help you unlock these.
- You can make your balloon payment more manageable. If you are currently paying off dealer finance it's likely you'll have a balloon payment to cover when your loan ends. Refinancing can allow you to pay off your balloon payment over an extended period if you aren't able to pay the lump sum.
- You can sign up with a better lender. Not all lenders are created equal. Some offer discounts on other products when you sign up for a car loan, better customer service, easier account management and add-ons that may not have been available with your previous lender.
How does refinancing a car loan work?
Refinancing your car loan means simply switching to a different lender that may be able to offer you lower rates, fewer fees or easier repayment options to help you pay off your loan sooner. If done correctly, refinancing your car loan can potentially save your hundreds, if not thousands, of dollars.
You can either refinance yourself or enlist the services of a finance broker, who will work on your behalf to get the best refinancing option. Either way, it’s important to compare the car loan refinancing options out there before making the decision to switch.
What should I look for in a refinancing car loan?
- Your repayments will be less. This is very important to check. Less interest does not always mean lower repayments, so remember to take into account upfront and ongoing fees as well as the loan term you're asking for and use a comparison rate calculator to determine the cheaper option.
- You won't pay more interest over the loan term. Lower repayments may just mean you're paying more interest over the loan term, usually because the term has been extended to lower your interest.
- The loan has the features that you want. If you want to be able to make extra repayments, repay the loan early, a redraw facility or an insurance product bundle, make sure the new lender offers this.
- The lender is legitimate. A number of lenders operate in the car finance space and it's up to you to sign up with a reputable compare. See how transparent the lender is with rates and fees and how easy they are to contact.
How to compare car loans when you want to refinance
If you believe refinancing your car loan could be a good option, there are some features you must compare when selecting what car loan is right for you:
- Interest rate. Ensure you compare the interest rate across all the car loans available to you. The lower the interest rate the better, so try and find a loan that gives you a low interest rate to assist you in saving money.
- Flexibility in repayments. Flexibility in repayments is a huge comparison point. Can you make weekly, fortnightly or monthly repayments? It’s also important to compare if car loans allow you to make additional repayments so you can pay off your car loan quicker. If flexibility is important to you, check out what flexibility loans can offer you and compare accordingly.
- Additional fees. Most refinancing loans will have fees you may be liable to pay. Understand all the fees you may have to pay both upfront and over time and look for a refinancing option with the lowest fees to help you save money over the duration of the loan term.
- Maximum loan amount. Each refinancing option will also have different maximum loan amounts that you can borrow. If you have a certain figure in mind that you need to borrow, look for a loan that will allow you to borrow this amount.
Benefits and drawbacks of refinancing
- Lower interest rate. When you refinance your car loan, one of the most important advantages is typically a lower interest rate. As with any loan, interest is usually what accounts for the highest costs. Keep an eye out for a car loan with a lower interest rate than what you are currently paying. Interest rates tend to fluctuate, so it’s all about selecting the right time to refinance to get the lowest interest rate.
- Lower repayments. If you extend your loan term when you refinance, you can lower your repayments. This is good for those who are struggling to make their regular repayments every month due to their financial situation. Adding additional years onto your car loan will lower your repayments and free up some much-needed cash.
- Get more features from your car loan. Refinancing your car loan may also mean you can benefit from additional features on your car loan that you don’t currently have. This can include the ability to make extra repayments or a redraw facility where you can redraw repayments when you need your funds the most.
- May end up paying more interest over the term of the loan. Refinancing may mean you end up paying more interest in the end. You may refinance with a lower interest rate but extending the loan term may mean you end up paying more interest. It’s recommended you figure out upfront if it is worth refinancing and if you will end up saving on interest.
- Exit costs and setup costs. Switching from your current car loan may mean incurring exit costs that you must pay. You may also be liable for setup costs with your new car loan. These are both additional costs and cons that you need to consider.
How you can refinance your car loan
- Check whether you will be charged a fee for closing your loan before the end of the term. If you will be, factor that in when working out if you'll save.
- If you want to go ahead and refinance, you then need to compare your options. Make sure you meet the eligibility criteria and are aware of all fees and charges. Once you've found the right loan to you, click "Go to Site" to apply.
- Select "refinancing" as the loan purpose.
- Submit the relevant documents and information. This will usually include information about the lender you're with and details about the car.
- Pay off your previous loan. This may be done on your behalf by your new lender or you may be required to organise this yourself.
- Close your previous loan. While the loan is paid off it's important to ensure the loan account is closed.
Picture: Shutterstock
I have a car loan and I would like to refinance it somewhere else with a better interest rate
Hello Savvas,
Thank you for your question.
You are on the right page! :)
You may put your loan amount and the desired term on the calculator at the top of the comparison table. This will help you get the figures down for the loan you’re likely to be comfortable with in terms of repayments.
It is worth mentioning that you need to review the qualifications and the loan terms prior application.
Hope this helps.
Cheers,
Jonathan
Good Afternoon,
I am looking to refinance my Harley Davidson motorcycle. The interest rate is extremely high.
The only default I have is from over 5 years ago – no current credit cards, no credit issues.
Is there another option I have to re-finance? Payout figure is approximately $28K
Hi AJ,
Thanks for your question.
You may try contacting a lender listed on this page for your motorcycle refinancing options. Please note that your approval will be on a case-by-case basis so make sure to read the criteria and requirements before you apply.
Hope this helps.
Cheers,
May
I have an existing car loan and im wanting to borrow an extra $20000. Adding it to my loan. Is that possible? Is that refinancing?
Hi Bob,
Refinancing involves you taking out a new loan to pay out your existing loan, so borrowing an additional $20,000 on your existing loan is just “topping up” your loan. You’ll need to get in touch with your lender to find out if this is possible and what the process is to apply.
Hope this helps,
Elizabeth
Hi, I want to refinance my loan. looking for right advice.
Hi Roy,
As a financial comparison service we can’t offer you personal advice, but any of the lenders on the page above can help you with car loan refinancing. You can use the table above to compare them. You can also click the “Speak to a broker” tab if you’d like some advice from a car loan broker.
Hope this helps,
Elizabeth
I have come to the end of my car loan and have a balloon left on it I have advertised the car privately to sell but not getting any interest as the balloon payment is quite high $35000 I don’t want to get in a situation where I need to buy another expensive car to get a trade price to cover the balloon as my goal is to reduce the monthly car payments as it is having an impact on my finances I’m wondering if my best option is to refinance the car for a 3 to 4 year term the car is a Holden HSV gts and in reasonably good conditions with low kms
Hi Anna72,
I can’t offer you any personal advice as the right option for you will depend on your own situation. However, sitting down and crunching the numbers may be a good place to start.
You can use a car loan comparison calculator to see where you might stand if you choose to refinance, and can also compare some of the available rates and fees using the comparison table on the page above.
If you aren’t getting much interest in your car, you could post it on a few different sites – take a look at some of our car selling tips here. You can also consider refinancing the balloon payment with your current lender.
I hope this information has been of use.
Thanks,
Elizabeth
Hi there I recently purchased a near new GT falcon for $56,000 at 13% paying around $1100 a month. It’s not the biggest rate or the smallest but because of all the hidden fees and what not the payout figure is roughly around $59000. Would there be any lenders out there that would take over this loan from my current lender. I’m sure i can get a better rate than 13%. Thanks
Hi Mark88,
Thanks for your question.
I can’t recommend a specific lender to you but you may want to consider a car loan broker. You can find out if you’re eligible by using the broker forms on this page and this page.
I hope this will help.
Thanks,
Elizabeth
If I own my car outright bought fir cash are there lenders who will refinance my car which is about 1 year old
Hi Graeme,
Thanks for your question.
Car loan refinancing refers to the process of moving a loan you have with one lender to another lender, as you own your car outright this is not an option for you. If you want to take out a loan and use your car as security, some lenders will let you attach it to the loan as a guarantee. You can find out more about secured loans on this page.
I hope this has helped.
Thanks,
Elizabeth
Hi,
Is there anyway on refinancing my car?
I currently got a car about 9months ago. Because it was my first, i jumped at the pre-approved loan, not reading the term or anything signed the paper. I have a 27.99% interest on that car loan (spending way too much money) my car was roughly $15,000.00 my repayment is $148.00 a week.
So please if i can refinance my car for lower rate, i would muchly appreciate it.
Kind Regards,
Naz
Hi Naz,
Thanks for your question.
Please note that finder.com.au is an online comparison and information service and is not a product issuer. If you would like to discuss your eligibility or options, please get in touch with a lender on this page.
You’ll need to check with your existing lender and enquire about what fees will be charged if you exit the loan. You may find that the fees will outweigh the potential savings you get by going with a lower interest rate. In this case it may not make financial sense to refinance.
Cheers,
Shirley
is there any way regarding refinancing my car without extra cost?
Hi Khel,
Thanks for your question.
Typically when you refinance you calculate the fees that are payable against the savings that you make. If your savings outweigh the fees then this could be a good indication that refinancing your car is possible without incurring extra costs.
Cheers,
Shirley
I am wanting to refinance my car loan, The payout figure is $14,000 and the interest is currently 23.99%. I am ex bankrupt but have been discharged and the &yrs were up oct 3rd 2015.
Can you help me with this. the car will be a secured loan.
Colleen
Hi Colleen,
Thanks for your question.
Please note that finder.com.au is an online comparison service and is not a product issuer. If you would like to discuss your eligibility or options, please get in touch with a lender featured on this page.
As an ex-bankrupt, your name will still appear on the National Personal Insolvency Index (NPII) which is accessible by lenders should they run a credit check. You may want to approach a smaller or second tier lender instead.
Cheers,
Shirley