Car loans with no early exit fees

author-avatar By on March 12, 2021
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Car loans with no early exit fees

Get ahead on your car loan and save time and money by taking out a car loan with no exit fees.

If you want to pay off your car loan as fast as you can without being financially penalised, you should look for a car loan with no early exit fees, as well as similar fees like extra repayment fees and redraw fees.

Compare low rate car loans with no early exit fees

The table below features some of the lowest rate car loans that don’t charge early exit fees

Lender
Advertised rate Comparison rate Monthly repayment Interest TypeVehicle TypeMaximum Vehicle AgeOngoing FeeApplication FeeTotal RepaymentEarly RepaymentInstant ApprovalOnline Application
FixedNew1 yearMore details

Green Car Loan

FixedNew4 yearsMore details
GET APPROVED WITHIN 24 HOURS

Car Loan (New and Dealer Used) (< 5 years)

  • Approval in 24 hours
  • Balloon options to reduce repayments
  • No ongoing fees, no discharge fee
GET APPROVED WITHIN 24 HOURS

Car Loan (New and Dealer Used) (< 5 years)

  • Approval in 24 hours
  • Balloon options to reduce repayments
  • No ongoing fees, no discharge fee
FixedUsed4 yearsMore details

Used Car Loan (up to 5 years)

  • Flexible repayment options
  • Can apply online
  • Approval is instant

Used Car Loan (up to 5 years)

  • Flexible repayment options
  • Can apply online
  • Approval is instant
FixedNew2 yearsMore details
QUICK APPLICATION PROCESS WITH NO FEES

New Vehicle Fast Loan Low Rate

  • Quick application process and no monthly fees
  • Low fixed interest rates with terms of up to seven years
  • New car loans cover cars up to 3 years old
QUICK APPLICATION PROCESS WITH NO FEES

New Vehicle Fast Loan Low Rate

  • Quick application process and no monthly fees
  • Low fixed interest rates with terms of up to seven years
  • New car loans cover cars up to 3 years old
FixedNew, Used99 yearsMore details
APPLY ONLINE
  • No extra repayment or early exit fees
  • Up to $75,000 in loan amounts
  • Funding approved within 24 hours
APPLY ONLINE
FixedNew, Used2 yearsMore details

Low Rate Car Loan Special Offer

FixedNew2 yearsMore details

New Car Loan

Rates based on a loan of $30,000 for a five-year loan term. Products sorted by advertised rate. Rates correct as of October 19, 2021. View disclaimer.

What is an early exit fee?

Making extra repayments on your car loan so you can pay it off earlier will reduce the overall cost of the loan. But there are some car loans on the market that charge an early exit fee if you pay off your car loan before the loan term has ended, or if you refinanced to another lender. Early exit fees (also known as early repayment fees) are usually more common in fixed car loans. Variable car loans generally don’t charge an early exit fee and allow extra repayments, which is good if you want to pay off your loan sooner, but fixed car loans are more common.

Most lenders do charge early exit fees because paying off a car loan early comes at a cost to them. They will have budgeted for your loan to be paid out over a certain number of years, which means they would have earned significantly more in interest over the agreed loan term.

What do car loan exit fees cost?

A large number of car loans don’t charge exit fees, so there are quite a few on the market that’ll charge you $0 if you pay it off early. According to Savings.com.au’s research, the lowest early exit fee among those that do charge one we could find was $20, while the highest was $800. The average early exit fee sits around the $150-$200 mark.

Early exit fees on car loans are generally lower than exit fees on home loans because they’re usually priced into the interest rate, but they can still be quite costly especially if you’re with a lender that charges the higher rate of $800.

What are the benefits of paying off your car loan early?

After a home, your car is probably the second biggest purchase you’ll ever make, so it can be smart to pay it off as soon as you can.

Paying off your car loan early can reduce the overall amount of interest you pay, saving you money. But depending on your loan, you may be penalised for doing so. If you’re in a financial position where you can afford to pay off your car loan early, make sure you find out what, if any, exit fees apply.

Sometimes the cost of an early exit fee could outweigh any savings in interest you might have made. But if you’ve got other outstanding debts with a higher interest rate such as a credit card, you should prioritise paying that off first.

To make extra repayments (and to withdraw them if necessary) your lender may also charge you.

Car loan extra repayment fees

The vast majority of car loans allow customers to make extra repayments. Only a few don’t, while a good number also let you make one-of lump sum repayments as well. Depending on the loan you may be charged a fee for making extra repayments, but $0 for this is more common. Check with your lender if they charge one.

Car loan redraw fees

A redraw facility on a car loan lets you withdraw any of the extra funds you’ve paid ahead of schedule should you need them. This is essentially the same as a home loan redraw facility, and redrawing these funds can negate the interest benefits of extra repayments.

Roughly half of car loans come with a redraw facility, Savings.com.au research found, and the fees for redraws are often $0 but can vary. For one example, St. George and other Westpac-affiliated banks charge a $10 redraw fee each time.

Many lenders also have minimum and maximum redraw limits, which can be as low as $1-$50 and as high as $30,000.

How to repay your car loan early

Increase your repayment frequency

One of the easiest ways to pay off your car loan early is to change the frequency of your repayments. Because there are 12 months in a year but 26 fortnights and 52 weeks, making fortnightly or weekly repayments can help you make an extra month of repayments without even realising.

Because interest is calculated daily, increasing the frequency of your repayments can lower the amount of interest you owe.

Make additional or lump sum repayments when you can

If you come into additional cash such as your tax refund, you should consider putting this money into your car loan repayments. Making additional repayments can also help you in the future if you miss a repayment.

Savings.com.au’s two cents

Paying off your car loan early can help you save money if there’s no early exit fee, and even if there is a fee, you can still save more in interest costs. But be mindful that zero early withdrawal fees aren’t the only features car loans have to offer that could save you money.

Always compare car loans and take other factors into consideration, including the interest and comparison rates, other fees and features such as a redraw facility which could be more suitable for your needs.


Photo by Craig Adderley from Pexels

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $30,000 loan over 5 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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author-avatar
Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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