If you're wondering whether to refinance your car loan, you're not alone. The Reserve Bank lifted the cash rate to 4.60% on 29 September 2026. It was the fourth rise this year, and the next RBA interest rate decision is due on 3 November. Two questions follow: have my repayments gone up, and would a car loan refinance save me money? Here's how to work it out, when switching pays off, and how to do it without getting stung by fees.
Do higher interest rates affect my car loan?
It depends on whether your car loan interest rate is fixed or variable. Moneysmart notes that dealers usually offer fixed rate loans, and most car loans in Australia are fixed.
| Your loan | What a rate rise means for you |
|---|---|
| Fixed rate | Your rate and repayments stay the same for the life of the loan |
| Variable rate | Your lender can pass the rise on, so your repayments can go up |
| Not sure? | Check your loan contract or latest statement, or call your lender |
On a fixed rate, the latest rise doesn't change your current repayments. What it changes is the price of new loans. That matters if you refinance, take out a new loan or have a balloon payment to refinance soon.
Should I refinance my car loan? Signs it could pay off
Refinancing means taking out a new loan to pay out your current one. It's worth a closer look if:
- you're on a variable rate and your repayments keep climbing
- your credit has improved since you took the loan out, for example you've paid down debts or a default has cleared
- your income or business is stronger than when you first applied
- you signed up at the dealership and never compared other lenders
- your balloon payment is coming up and you need a plan for it. Our balloon payment guide walks through your options
- you want to change the loan itself, for example to remove a second borrower or adjust the term.
When refinancing probably won't save you money
- Early payout fees on your current loan cancel out the saving.
- You're close to the end of the loan, so there's little interest left to save.
- You'd stretch the term. Lower repayments over more years can cost more in total interest, which Moneysmart warns about.
- Your car is worth less than you owe, which can limit what lenders will offer.
From the broker's desk
“The question we hear most since the rate rises is 'have my repayments just gone up?' For most people on a fixed car loan, the answer is no. The clients who get the most out of a car loan refinance are usually the ones whose situation has changed for the better. They've got a stronger credit file, a better income, or a business with a couple of years of trading behind it. If the numbers don't stack up once every fee is counted, we'll say so, and you keep the loan you've got.” Dayle Filliponi, Lend It Finance Group
Do the maths before you refinance a car loan
Moneysmart's advice on refinancing is to compare the total cost, not just the repayment. Gather these numbers first:
| Check | Where to find it |
|---|---|
| Payout figure today | Ask your current lender for a payout letter |
| Early termination or payout fees | Your loan contract, or ask your lender |
| The new loan's comparison rate | The quote. It combines the interest rate and most fees in one number |
| New establishment and ongoing fees | The quote and the credit guide |
| Remaining term vs new term | Your statement vs the new quote |
| Total repayable, old vs new | Compare both over the same term where you can |
Want a quick feel for repayments first? Try the car loan repayment calculator on our car loans page, then get a real quote to check.
How to refinance a car loan, step by step
- Ask for a payout letter from your current lender, and check for early payout fees.
- Check your credit file for free and fix any errors before you apply.
- Get your documents together: ID, payslips or business financials, recent bank statements, the car's details and your payout letter.
- Compare offers on the total cost after fees, not the headline rate.
- Apply once you've chosen. Lots of applications in a short time can leave lots of enquiries on your credit file.
- Settle. Your new lender pays out the old loan, and the security moves to the new loan.
Can I refinance my car loan with the same lender?
Sometimes. It's worth calling your current lender to ask whether they'll review your rate, especially if your credit has improved. If they won't move, refinancing with a different lender is the usual next step.
Refinancing a business car or ute
If your vehicle is financed through your ABN, usually with a chattel mortgage, you can generally refinance the same way. Lenders will look at your trading history and financials. If your paperwork is behind, low doc options are available up to $500k, subject to lender criteria. Not sure which structure suits you? See our chattel mortgage vs finance lease guide, and ask your accountant how a refinance affects your tax.
Struggling with your repayments?
Refinancing isn't the only option when money is tight. Contact your lender early and ask about hardship arrangements. Free, independent help is also available from the National Debt Helpline on 1800 007 007.
How Lend It helps with a car loan refinance
We compare 70+ lenders for car loans and car loan refinancing. We show you your current loan and the new one side by side, with fees included. If refinancing won't save you money, we'll tell you. Approvals can come through in as little as 24 hours.
Getting a quote doesn't affect your credit score. We may run a soft check, and a full credit enquiry only happens when you apply. We're based on the Gold Coast, help clients Australia wide, have 250+ Google reviews and we're open 7 days, 8:30am to 6pm.
FAQs
Can you refinance a car loan?
Yes. Most car loans can be refinanced if you meet the new lender's criteria. Check your current contract for early payout fees first.
Can I refinance my car loan with the same lender?
You can ask. Some lenders will review your rate, especially if your circumstances have improved. If not, you can refinance with another lender.
Does refinancing a car loan hurt my credit score?
A new application usually leaves a credit enquiry on your file. One well chosen application is generally fine. Lots of applications close together can count against you.
Can I refinance a car loan with bad credit?
Sometimes. Some lenders consider past credit issues, but the trade off is usually a higher rate. Get advice before you apply.
How long does it take to refinance a car loan?
Once you have your documents and payout letter, approvals can come through in as little as 24 hours. Settlement timing depends on both lenders.
Should I refinance before the November RBA decision?
No one can promise which way rates will move. If your loan is fixed, the decision won't change your current repayments. If you're on a variable rate and want certainty, a fixed rate refinance locks your repayments in. Compare the total cost first.
See if a car loan refinance stacks up
Send us your payout letter or latest statement and we'll run the numbers both ways. Get a car loan quote or call 1300 082 012.
Researched with AI assistance, written and checked by Dayle Filliponi.
General information only. This article is not financial, tax or legal advice and doesn't take your personal circumstances into account. Talk to your accountant or a licensed adviser before you make a decision. Information current as at 23 October 2026. Lend It Finance Group is a credit representative (535206) of COG Compliance Services Pty Ltd, Australian Credit Licence 384428.