Did you know refinancing your car loan could save you money in interest and repayments? Lending rates change often and so it pays to keep an eye on the loans market. Chances are, right now, you are paying more than you need to. Rates on car loans have never been lower and making the switch to a better value deal is easier than you think. Just how much could you save by refinancing? While that depends on your personal circumstances, if you have been repaying your existing car loan without default for more than 12 months Ausloans can definitely help you lower your rate and reduce your payments.
Refinancing your car is all about finding a loan that can deliver you a saving. However, with so many loan products in the market and 1000's of lender variables to consider, finding the right solution can be a time consuming and confusing experience.
At Ausloans we take the pain out of car loan refinancing and do all the heavy lifting for you. Simply complete our 2 minute online application and we will search our extensive lender panel to find a refinance deal that works for you.
Refinancing your car loan is basically the same as getting a new car loan with one simple difference. When you are refinancing you are basically taking out a new, lower rate loan to pay out your existing car loan. This results in a new loan agreement, and a new loan term (the length of your loan in months) and most importantly a lower rate to help you save on your car loan. Ready to get refinanced? Let us compare the market and use your personal profile to deliver you the best car refinance offers from multiple lenders
Our simple, paperless application makes it easy for you to apply online. It only takes a few minutes.
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Before refinancing your car loan it is important to determine if there is any advantage. If you’re considering refinancing here are 5 steps to help you decide if refinancing is right for you.
Is your loan up to date? The first requirement for refinancing is that your current loan is being serviced without default. If you have missed repayments or have repayment defaults you will not be able to refinance.
Tip: Make sure you are paying your existing loan repayments on time. Our advice to boost your credit score- set up direct debit from your bank account to ensure you never miss a payment.
Before applying to refinance you will need to know exactly how much you need to pay out your existing loan. To do this simply contact your existing lender and ask how much you need to pay out the existing loan.
Tip: Check with your existing lender to determine if there are any loan discharge fees for early payout.
This is very important to check. When comparing your existing loan against a new lower rate loan offer remember to check the loan fees to determine if the new loan is actually the cheaper option.
TIP; consider all fees and charges for existing loan payout and new loan establishment.
When refinancing you need to consider not only the rate being offered but also the term of the loan being offere3d. Extending the term of your loan may deliver lower weekly repayments however you may end up paying more in interest over the course of the loan.
Loan conditions including interest rate, amount of the loan, ability to make extra repayments, fees for early loan repayment and redraw facility vary significantly between lenders and loan products.
Tip: Before deciding to refinance your car loan ensure the loan has the features you need and that the conditions of the loan don't impose penalties on you for actions like early payout.
Refinance Car Loans
Car loan refinancing means replacing your existing car loan with a new one. When you refinance your old loan will be paid out in full and you will have a new loan agreement, a new lower interest rate and possibly a new term or length of loan.
If any of the following situations apply to you it may be time to consider refinancing your car loan
Your credit score increased
Your credit score is one of the main determining factors in qualifying for a refinance loan. If your credit score has improved since you first took out your loan it is possible you could qualify for a better interest rate which would reduce your monthly repayments and save you money.
Interest rates have dropped
If interest rates were high when you first financed your car you are probably paying more than you need to. Small drops in interest rates can add up to massive savings on weekly repayments over the term of the loan.
You didn’t shop around for rates initially
Did you pay too much for your original car loan? If you took a car loan offer from the dealership without exploring your finance options you could be paying more interest than you need to. Our advice , check your rate against currently available car loan rates.
Your monthly payment is too high
Are you struggling to meet your existing car loan repayments? If so refinancing your car loan and extending the term of the loan can help reduce the pressure. If you extend the term of the loan you can reduce your repayments however be warned , you will pay more for interest over the lifetime of the loan. .
Refinancing a car loan is as simple as submitting an application to the lender just like you would with a normal car loan. You will still need to produce proof of employment and income to qualify for the new loan
Refinancing is designed to help consumers who have a bad credit car loan get a better rate. However refinancing will only be possible if your circumstances have changed, interest rates have dropped significantly or your credit score has improved.
If any of the following apply to you, you probably won't be eligible for a refinance car loan.
The simple answer is yes. You can either lengthen or shorten the term of your car loan
Shortening the term of your car loan will result in higher weekly or monthly repayments but will reduce the amount of interest you pay on the loan.
In contrast, lengthening the term of your loan will result in more affordable weekly or monthly repayments, however as you have extended the time to pay back the loan, you will pay more interest on the total amount borrowed.
Refinance car loan documentation requirements are basically the same as applying for a normal car loan. You will need the following
1. proof of employment and income (usually in the form of payslips or BAS statement for ABH holders.
2. 3 months of bank statements to show existing loan repayments, credit card and living expenses.
There are a number of variables to consider when answering this question including, the amount owing, the interest rate and erm of the loan. Also any early exit fees or new loan establishment fees. If you are paying a high rate right now there could be massive savings to be had by refinancing. Here's an example.
Refinancing a $40,000 loan from 14.99% to 8.99% will save $116 per month. Times that over the length of the loan and you will save over $6500 in interest.