How does refinancing a car loan work?
A new lender pays out your old loan, and you start fresh repayments on new terms. The car stays in your driveway the whole time — only the lender behind it changes.
When you refinance a car loan through us, we do the legwork: we check what you owe and what you want to change, then search our panel for a lender that suits.
- 1
Grab your payout figure
Ask your current lender for a payout quote. It shows the exact amount to clear the loan, including any charges for finishing early.
- 2
Tell us your goal
Lower repayments, a shorter term, a balloon plan or rolling in other debts — the two-minute form captures it.
- 3
We find the fit
We search 60+ lenders and come back with an option that makes sense — or tell you straight if staying put is smarter.
- 4
Settle and switch
The new lender pays the old one directly. Once you’re approved, settlement can be quick, depending on the lender.
When is it worth it to refinance a car loan?
It’s worth a look when your numbers or your life have shifted since you signed. The test is simple: once exit fees are counted, does the new loan cost less overall or fix a problem the old one can’t?
| Your situation | How refinancing may help | Worth checking |
|---|---|---|
| Your credit has improved since you bought the car | You may now suit lenders who weren’t an option before | Whether the saving outweighs any exit fee |
| You signed dealer finance in a hurry | You can review the deal without a salesperson waiting | The payout figure and early termination fee |
| Repayments feel tight | A longer term can lower each repayment | Total interest usually rises over a longer term |
| A balloon is due soon | The lump sum can be spread across a new loan | The car’s value compared with what you owe |
| You’re juggling several debts | One repayment can be easier to manage | Whether the car loan belongs in the mix at all |
Can I refinance a balloon payment?
Yes — it’s one of the most common reasons people come to us. Instead of finding a lump sum on the due date, you take out a new loan for the balloon amount and pay it off in regular instalments.
When the balloon falls due, you generally have four choices:
- Pay it in cash and own the car outright.
- Refinance the balloon into a new loan and keep driving.
- Sell the car privately and use the proceeds to clear it.
- Trade in and upgrade, with the trade-in covering the balloon and new finance for the next car.
Start the conversation a few months out so nothing feels rushed. Our balloon payments guide unpacks how these final payments work.
Are there break costs to refinance a car loan?
Sometimes. Plenty of car loan contracts include an early termination fee, and some fixed-rate loans carry a break cost if you pay out early. The only way to know for sure is to read your contract and request a payout figure.
A payout figure usually includes:
- The remaining principal
- Interest accrued since your last repayment
- Any early termination or break fee
- Any other amounts owing under the contract
Can I refinance to lower my repayments?
Often, yes — through a sharper deal, a longer term, or both. A longer term shrinks each repayment but usually adds interest overall, and we’ll show you that trade-off plainly.
Some people also fold a credit card or personal loan into the new car loan to get down to one repayment. Our page on debt consolidation loans explains how that works.
Credit file a bit bruised? Refinancing may still be possible, especially if you’ve kept up with your current loan — see our bad credit car loans page.
Already behind on repayments? Talk to your current lender early about hardship options. The free, confidential National Debt Helpline on 1800 007 007 can help you weigh things up.
What you’ll need
- Payout letter from your current lender
- Car registration papers
- Driver licence
- Recent payslips or other proof of income
- Your current loan contract (to check exit fees)
- Details of your other debts and repayments
- Car make, model, year and odometer reading
Who it usually suits
- An existing loan on a car, ute, SUV or EV
- A car whose value sits reasonably close to, or above, what you owe
- Steady income that covers the new repayments comfortably
- Over 18 and living in Australia
