Refinance Car Loan Interest Rates

Cheap September Refinance Car Loan Interest Rates & Deals

There are any number of reasons you might be looking to refinance your car loan. Perhaps your circumstances have changed, or maybe you're after a better interest rate or more flexible loan conditions.

Make sure you check the fine print of your current car loan to ensure it's going to be worth your while to switch to another one. Some may hit you with break fees.

That's why it's important to ensure you're getting the best refinance deal you can. A low interest rate should be a key feature.

Low-rate Refinance Car Loans

To get you started in your research, I've done a scout of the Savings database to find some of the lowest interest rate car loans being offered on the market. Make sure to check these out:

• Used Car Loans - Harmoney: Unsecured Car Loan (3 Years) rates from 5.76% p.a. (5.76% p.a. comparison rate*) 
• Secured Car Loans - MoneyPlace: MoneyPlace New Car Loan Excellent Credit (5 Years) rates from 5.67% p.a. (6.10% p.a. comparison rate*)
• Unsecured Car Loans - Harmoney: Unsecured Personal Loan (Excellent credit) (5 Years) rates from 5.76% p.a. (5.76% p.a. comparison rate*) 
• Green & Electric Car Loans - Credit Union SA: Secured Green Loan (HL members) (1 Year) rates from 5.64% p.a. (5.64% p.a. comparison rate*) 

As with any financial product, be sure to check the fine print before you sign anything and ensure you get a loan that's going to be the best for your individual circumstances.

Good luck and see you next month.

Denise Raward - Senior Finance Journalist

For more information on how we’ve selected these products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of 6 September 2026. View disclaimer

Why refinance your car loan?

Refinancing your car loan means replacing your current loan with a new one. It can be internal (switching to a different loan product with the same lender) or external (switching lenders). 

Borrowers refinance for a few common reasons, often to save money via lower interest rates and fewer fees, or improve flexibility through better loan features. 

Benefits of refinancing a car loan

• Save money on interest rates 

If interest rates have changed (i.e. lower) since you first took our loan, or your credit score and financial situation have improved, refinancing may allow you to lock into a lower interest rate. Even a small reduction can add up to meaningful savings over the life of the loan. 

Here’s an example of savings by refinancing a $35,000 car loan from the original 8.9% p.a. interest rate to 7.9% p.a.:

• Loan amount – $35,000
• Loan term remaining – 5 years

Total interest saved – about $1,010

This shows a 1% rate reduction on a $35,000 car loan cuts repayments by around $17 per month, which adds up to more than $1,000 in savings over the five years you have left to repay the loan. If refinancing fees are lower or, better yet, waived, most of that saving flows straight to the borrower. 

• Pay fewer fees

Your current car loan may be hitting you with a laundry list of fees including ongoing and other unnecessary charges. These can add significant cost to your loan over its lifespan. Refinancing may allow you to switch to a loan with fewer or no ongoing charges, reducing the overall cost of borrowing.

• Access better loan features

Different lenders offer different features for your car loan. By refinancing, you may be able to access a loan that allows you to make a lump sum or additional repayments to pay it off sooner. Or you can switch to one with more flexible repayment schedules. Whatever the case, refinancing allows you to find a loan that better suits your needs.

Drawbacks of refinancing a car loan

• Refinancing fees and charges

Switching loans can trigger costs such as exit fees, break costs (if fixed rate), application fees, and vehicle valuation fees. Make sure to calculate the total cost involved in refinancing your car loan and weigh it against the potential savings from securing a lower rate. If the savings don’t outweigh the costs, you may want to reconsider your plans. 

See also: Refinancing Costs Calculator

• Negative equity risk

When you refinance, your new lender may ask for a valuation of your vehicle. If your car is worth less than what you owe (negative equity), refinancing can be difficult or unavailable, or you may be offered less competitive terms.

How to refinance a car loan

The process of refinancing your car loan is typically similar to applying for a standard car loan, but with a few extra checks along the way. 

1. Step 1: Review your current car loan

Before you refinance, take a closer look into your current car loan. Check your interest rate, remaining loan balance, time left on the loan, and any early exit or break fees. These details are typically listed on your loan statement or on your lender’s website. 

From then, you can begin to work out whether refinancing will save you money or otherwise.

1. Step 2: Check your car’s current value

Before a lender approves your refinance car loan application, they will assess whether your vehicle is worth more than what you still owe. If the loan balance is higher than the car’s value, you may be in negative equity, which can make refinancing harder or more expensive, i.e. higher interest rates. 

Free online valuation tools or dealer estimates can give you a rough idea of the current value of your vehicle. 

1. Step 3: Check your credit score

Car loan pricing in Australia is usually risk-based, that’s why your credit score strongly influences whether you’re approved for a car loan and the interest rate you will be offered. If your score has improved since you took out the original loan, you may now qualify for a better rate. Checking your credit report before applying helps you see where you currently stand and avoid surprises later. 

See also: Credit Score Calculator

1. Step 4: Compare car loan options

Compare interest and comparison rates. However, for most car loans in Australia, you won’t know the exact interest rate you will get until the lender has fully assessed your application and made you a formal loan offer. This means, advertised or estimated rates aren’t guaranteed until the paperwork is in front of you. 

Aside from interest rates, compare fees and loan terms and features too. 

1. Step 5: Calculate potential savings

Compare your current total remaining repayments with the new loan and factor in all fees (both upfront and ongoing) that will be charged by your current and new lenders to determine whether refinancing is worth it. 

1. Step 6: Apply for the new loan

Once you’ve chosen a lender, submit your application. You’ll typically need:

• Proof of identity
• Proof of income
• Details of your existing loan
• Vehicle registration details

1. Step 7: New lender pays out your old loan

If approved, you do not need to deal with your old lender, your new lender will handle the transfer. Your new lender will pay off your existing loan, and your car loan security will be transferred. 

But before you bid your old lender adieu, confirm your old loan balance is cleared first. 

1. Step 8: Start repayments on your new loan

You then begin making repayments under the new terms. Make sure you’ve confirmed the repayment amount and dates and whether extra repayments are allowed without penalty with your new lender. 

What to consider before refinancing a car loan?

Car value

Before refinancing your car loan, it’s important to consider the value of your vehicle. Typically, this will not be the amount you paid for it. 

Cars generally depreciate over time, and if you owe more than your car is currently worth, you may be seen as a higher lending risk and could find refinancing more difficult. This is because if you were to default and your lender had to repossess and sell the vehicle, they may not recover the full loan balance. This situation is called negative equity. 

There are insurance policies, such as car gap or motor equity insurance that covers this, but these aren’t always cost-effective and aren’t always offered by all lenders. To improve your chances of refinancing, it’s better to have a clear idea of your car’s current value and make sure it is more than what you currently owe.

See also: Car Depreciation Rates and Calculation

Remaining term on your loan

Before refinancing, consider how much time is left on your current loan and whether the potential savings justify the effort and outweigh the costs. 

For example, if you only have a year left on your car loan, refinancing may end up costing you more in fees than if you were to simply finish the loan. On the other hand, if you have five years left on a seven-year loan term and believe your current rate is uncompetitive, refinancing might be worth considering. 

Get across the 'change' costs

Refinancing can involve exit fees, valuation fees, application fees, and break costs. If you’re close to the end of your loan, these expenses may outweigh any interest savings. 

That said, lenders may occasionally waive some fees as part of promotional offers, so it can be worth keeping an eye on what’s available in the market. 

Your credit score

Many borrowers don’t realise that every credit application is recorded on their credit file and can affect their credit score. This means refinancing your car loan frequently may make it difficult for you to secure good-value interest rates on future loans, such as a home loan or a personal loan.