Save thousands by refinancing your car loan

Here are the steps to take into account when refinancing a car loan:

Get current on your existing car loan & determine the balance

If you are behind on your current loan repayments, chances are you will not be eligible for a reduced rate for the new loan term. Make sure you’re up to date on all your loan repayments to maximise your savings. 

You should also get in contact with your existing lender to obtain a payout letter that confirms exactly how much is outstanding, as this will be needed to finalise your application.

Use our Driva platform to compare refinancing deals

Use our simple online platform to compare car loan options from multiple lenders and reduce your monthly repayments with a lower rate through refinancing - we can pair you with the perfect car loan refinance option to suit your needs. 

Evaluate fees vs savings

Find out what one-off or ongoing fees you are likely to incur when refinancing your car loan. Your current lender may charge a fee upon discharge of your existing car loan and your new lender may charge an application or establishment fee. If you’re unsure, get in touch with one of our car loan experts who will be able to confirm if any payout fees apply.

With Driva's online platform all lender fees and charges (including any fees that lenders pay to us) are already built into the personalised car loan quotes, which means the monthly repayment figure you see is exactly what will come out of your account each month and fully inclusive of all costs.

Apply for a refinance car loan

Once you've decided to refinance and found a suitable lender simply apply with a few easy clicks. We’ll then do all the legwork to assess your loan application and get funds transferred.

Here are a few key tips to keep in mind when evaluating whether to refinance your car loan:

• Make sure the new loan meets all your desired criteria. This could include flexibility with making additional payments without penalties or the availability of a redraw option that would allow you to take out extra payments if needed. These features might help you pay off your car loan sooner. 
• Before you apply for refinancing, make sure you are in a good position to do so. For example, if you have been financially impacted by the global pandemic, this may affect your ability to obtain approval for a new car loan or maximum car loan amount.
• When considering whether to refinance a car loan, it’s important to consider the value of your vehicle. Typically, the current market value will not be what you paid for it as cars (generally) depreciate in value over time. If you owe more money to your lender than what your car is worth, you may find it more difficult to refinance your car loan as you will be considered a higher-risk borrower. Make sure you have a good idea of what your car is currently worth and ensure that it's more than what you currently owe in terms of your existing loan for your best chance to save with a lower rate by refinancing your car loan.

We work with a panel of more than 30 different lenders so you can be confident that the tailored loan options we show are a good fit for your chosen car and personal financial situation. Our smart refinancing platform will automatically show you the lenders with the best rate options for you, but the final decision is completely up to you.

No. Checking your car loan refinance options with Driva doesn't impact your credit rating.

Only once you've chosen your preferred lender, submitted your final application to us, have been vetted by the Driva team and provided consent will your application be shared with your chosen lender and a full credit report run. This way we make sure you don’t have unnecessary credit enquiries on your file - only once we know you have a high chance of approval and you are happy to proceed with your new car loan do we give lenders authority to run the required credit checks!

We’re a digital platform that matches borrowers with lenders. We help you navigate and compare lender options across vehicle loans, personal loans and commercial loans so that you can find the best rate and loan term length based on your personal situation. Whether it's purchasing a new electric car or debt consolidation, Driva can help you find competitive personalised rates without impacting your credit score.

Still tossing up finance? Head to our guide on 'Is It Worth Getting A Car Loan?'

Many car loans will come with early repayment fees, exit fees or early termination fees, and most refinancing lenders charge an establishment fee. 

With Driva, the repayment figures you will see on your car loan options are fully inclusive of all fees and charges. This means you can reliably compare your car loan refinancing options without fear of any hidden surprises.

If you have a secured loan, an unsecured loan, or a personal loan, you may be eligible for refinancing. Get your unique rates in less than one minute, and we'll show you which refinance car loan alternatives are available to you.

There are many reasons why you might be looking to refinance your existing loan, like finding a car loan with a lower interest rate or better terms to save money in the long run.

Your credit score has improved

If you've been consistently making your monthly payments with your previous car loan, and as a result your credit rating has improved, you may be able to secure a new car loan with a lower interest rate.

You didn't get a great deal with your first car loan

You might be considering refinancing your current car loan if it has a high interest rate or some unfavourable borrowing conditions (like early repayment fees, monthly account fees or charges on extra repayments). Perhaps when you originally took out the car loan you weren’t fully aware of all your options, and now you’re looking to get a more flexible car loan with better loan terms and a lower rate.

You want to refinance to decrease your monthly repayments

If your monthly car loan payments are making it hard to afford life, you can look into refinancing your car loan so that your payments are more manageable. A longer car loan term would reduce the costs of the loan by spreading them out over a broader time period. Extending your loan term would most likely result in paying more interest over the life of the agreement. But if you're most concerned about your monthly car loan payments, this might be the best option for you.

You want to save more money on your loan in the long term

If you're less concerned about the monthly payments of your loan, but want to make sure you are saving money in the long term, then refinancing your existing car loan might be for you. One way to lower your monthly repayments is by changing to a new lender with a better interest rate, but don’t change the amount of money you pay per month. This will allow you to have smaller loan repayments and to pay back the loan in less time, meaning paying less overall over the course of repayment. You might even be able to make additional repayments without adding any extra monthly fees if the terms of your loan allow it.

You'd like to change your loan conditions

If you decide that you want to modify or change the conditions of your car loan, then you may choose to refinance your loan. To improve your repayment plan, you may choose to do things like add a balloon payment, have the option to pay out the loan early or change the type of loan from a secured car loan to an unsecured car loan.

You are taking advantage of low interest rates

In order to take advantage of Australia's current low interest rates, you can refinance your car loan. Rates might be better now than when you initially took out the loan and this could provide an excellent opportunity for you to refinance your car and save money.

While it’s a lot easier to refinance your car loan if you have a good credit history, it’s still possible to find a refinancing option with a bad credit rating. If you have been making all of your loan repayments on time and in full, your credit rating may have improved which would then make it easier to refinance. Improving your credit rating indicates to lenders that you're becoming a lower risk borrower, so they are more willing and able to offer you a competitive deal on a new car loan.

When you use Driva’s smart car loan refinance platform, you’ll clearly be able to see all of your loan options, the accompanying interest rate and estimated car loan repayment amount for each. If you’ve got more questions, our friendly and knowledgeable car loan experts are happy to help! Get in touch at contact@driva.com.au or give us a call on 1300 755 494.

Absolutely! Driva can help you secure refinance for almost any type of vehicle loan, from caravans to motorcycles, and boats to jet skis.

While refinancing your car loan can be a great option for many individuals, it’s important to note that there are a couple of drawbacks that come with refinancing.

Entry and exit fees

It’s important to understand all of the fees involved in refinancing your car loan - if you don’t you might end up spending more money than you would have if you didn’t refinance! For this reason, it can be a good idea to only consider refinancing if you have more than one year left on your existing car loan.

Can be difficult to secure

If you’re not in a relatively solid financial position, you might find it quite difficult to find a lender who is willing to refinance your loan. Before you apply for refinancing, make sure you’re up to date with all of your existing debt obligations.

There are a wealth of car loan options available to both consumer and commercial customers. For individuals, we can facilitate secured loans, unsecured loans and personal loans. If you’re using a vehicle for business purposes, we have a range of commercial car loan products available including chattel mortgages, hire purchase arrangements and novated leases. 

All of our car loans have fixed interest rates, meaning that the interest you pay won’t change over the duration of the loan.

A balloon payment is an optional feature that you can add to your car loan, where you’ll make smaller monthly payments throughout the loan, but will need to pay a lump sum balloon payment at the end of the loan. The balloon payment amount is often between 10% and 50% of the total car loan amount.

It’s normally a good idea to wait for at least six months or a year after taking out your first loan to think about refinancing. Making another credit inquiry after a short amount of time might damage your credit rating and affect the potential savings you might have been able to make by refinancing your car loan.

Just like when you got your first car loan, you’ll need to provide a few documents in order to process your loan refinance application. These vary between lenders but normally include a driver’s license, two recent pay slips and a copy of your bank statement.

When you’re comparing car loan options from lenders, you’ll probably notice a lender quoted APR (annual percentage rate) and a comparison rate. The APR doesn’t include any fees so it can be a bit misleading. 

We recommend paying more attention to the loan comparison rate because it includes nearly all the fees you’ll need to pay on that loan, so it’s a pretty accurate representation of what you’ll end up paying. Note that the comparison rate doesn’t include things like stamp duty, nor cost savings like fee waivers.

Refinancing a car loan can have a temporary negative impact on your credit score. When you apply for a new loan, the lender will likely conduct a hard inquiry on your credit report, which can lower your score by a few points. However, if you make timely payments on the new loan, your score should recover and may even improve over time. It's important to note that refinancing can actually help your credit score in the long run if it allows you to make payments more easily at a better car loan interest rate, a more manageable loan contract and avoid missed payments or defaults.

Yes, refinancing your car loan can help you obtain a lower interest rate and potentially save money on your monthly car loan repayments. At Driva, we work with over 30 Aussie lenders to help you find the best possible refinancing options based on your unique financial situation. To determine if refinancing is right for you, consider factors such as your current interest rate, remaining loan balance, credit score, and the length of your loan. Our team of credit professionals can guide you through how to refinance car loans and help you make an informed decision that meets your needs.