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How to refinance a car loan

If you’ve been paying off your car for a while, it might be a good time to refinance your car loan. Simply put, refinancing is when you switch your car loan to get a lower interest rate. It’s a clever way of getting a better deal on your loan and save some money down the track.

Refinancing your car loan can also give you access to better loan features to help you pay it off faster and smarter. That’s why we’re here to explain how to refinance a car loan, the benefits of doing so and more, so you can decide if it’s the right route for you.

The benefits of refinancing your car loan

Refinancing comes with great benefits, including:

Lower interest rate

Securing a better interest rate on your car loan is one of the main reasons people tend to refinance. Getting a lower rate on your new loan means your monthly repayments can be a lot less than they were with your previous lender.

Shorter loan term

When you refinance your car loan, you can usually change to a shorter loan term. This can help you pay it off sooner, so you can improve your credit score and clear some debt. Another option is to extend the loan term to stretch things out and take your time in paying it off.

New features on your loan

Switching to a new loan can give you access to a range of different features. When you refinance your car loan with us, you’ll get no monthly fees, unlimited extra repayments, free redraw, and a personalised rate based on your credit history.

What to consider when refinancing a car loan

There are some one-off costs you’ll need to consider when refinancing your car loan. While these fees can put some car owners off from switching loans, the long-term benefit of having a lower rate is often worth it.

Knowing what these fees are before deciding to refinance can help you be prepared for when they come up during the process. Some of these costs include:

  • Early termination fee – this cost covers the loss that the original lender might have if you end your car loan earlier than the agreed term. For example, if you refinance in the second year of a five-year loan term, you might have to pay this fee.
  • Transaction fee – this type of fee comes from the new lender for processing and completing the refinancing process, which includes paperwork and verification.
  • Registration fee – this covers the cost of registering your new loan with the new lender.

What type of car loans can you refinance?

You can refinance any type of car loan, including secured, unsecured or green car loans. And you may also apply for one of a new type of car loan if it works in your favour.

For example, if you bought a hybrid or electric car before you learnt about green car loans, then you might be able to switch loans – unless your hybrid or electric car is over seven years old.

Car refinancing checklist

The key to a successful refinancing application is being prepared. That’s why we’ve shared a simple checklist below that you can use to be refinance ready.

Eligibility Checklist

You must:

  • Be at least 18 years old.
  • Be an Australian citizen or permanent resident.
  • Earn a regular income.
  • Have not been bankrupt or insolvent in the last five years.

Documents to prepare for car refinancing

You need to have:

  • Proof of identification, like your driver’s license.
  • Proof of income and expenses, like a pay slip and list of expenses.
  • Vehicle information, like the car model and year.

Learn more about car buying

Our articles can help you get on the road towards your dream car.

How to get a car loan

If you want to buy a car, then taking out a car loan can make all the difference. Learn everything you need to know about getting a car loan in our article.

Read more
What is a Green Car Loan?

There are some great options out there to help you buy an electric car. One of these is a green car loan – and we explain what you need to know in our article.

Read more
How to pay off your car loan quickly

From having a budget to automating payments, discover actionable ways to pay off your car loan faster. Unlock financial freedom with clever repayment methods.

Read more
Clever car loan refinancing
  • Personalised interest rate
  • $0 monthly fees
  • Unlimited extra repayments
  • Free redraw
  • Flexible payment options
  • No penalties for early payout

Explore your car refinancing options

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Important Information

This is general information and does not take into account your objectives, financial situation or needs.

Loans are issued by Great Southern Bank, a business name of Credit Union Australia Ltd ABN 44 087 650 959, AFSL and Australian Credit Licence 238317. Lending criteria, limits, conditions and fees apply.

Rates current as at 9 June 2024 and subject to change.

Your loan contract will state the minimum monthly repayment amount. You can arrange with us to make repayments on a weekly or fortnightly basis.

1. Comparison rate examples are accurate for a personal loan amount of $30,000 secured loan over a term of 5 years. WARNING: Comparison rates are true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

2. Comparison rate examples are accurate for a personal loan amount of $30,000 unsecured loan over a term of 5 years. WARNING: Comparison rates are true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

3. A $200 minimum withdrawal amount applies for redraws conducted in-branch. Redraw facility is available for Great Southern Bank Personal Loan products on offer from 6 June 2017.

To view the Target Market Determination for this product, please click here.

*The rate you are offered is calculated based on your personal circumstances and credit history. A few different factors are considered, including:

  • Your credit score.
  • Information provided in your application.
  • Existing loans.
  • The loan amount and your perceived ability to repay the loan.

Your personalised rate won’t be confirmed until you receive an offer from us (if approved) and is subject change before your loan settles.