How to Refinance Your Car Loan in Australia

Not happy with your current loan and are looking for a better deal? One of the best ways of getting a better interest rate on your car loan is to refinance. Refinancing is the process of replacing your current loan with another loan under different terms and interest rates.

That brings us to the question, how do you refinance your car loan in Australia?

Shop for Cars has put together a guide on how you can refinance your car loan in 2022.

Let’s get into it.

1. Contact Your Existing Lender

If you are looking to refinance your current loan, the first and most important thing that you need to do is contact your existing lender. Speak to them about your plans of refinancing, some lenders have different terms and conditions for refinancing so you first need to work out what you need to do and how much refinancing will cost you.

Some lenders will charge you a fee to change to another provider, so it is important that you find out with your current lenders what their process is and what you need to do. The benefit of speaking to your current lender is they may instantly review your current rate on the spot in an effort to keep you with them.

Speak to your lender, understand what you need to do and hear what they may be willing to offer, once you have done that you can move onto the next point.

2. Shop Around

Once you understand where you stand and what you need to do to refinance your current loan, it is time to start shopping around. There are an abundance of lenders available in Australia in 2022, all of which are fighting for your business.

Get online and start your search, see what other lenders may offer you. It is important to consider all options, the last thing you want to do is keep your list narrowed to only a select few lenders. The more you shop around, the cheaper the rate you may be able to get.

3. Get Your Documents Together

To refinance your car loan, you will need to get some documents together. Think of refinancing like applying for a new loan again. As such your new lender of choice will want to assess your application to see if you are a customer who will fulfil and make repayments on time.

You may need to get your current loan agreement together, your recent payslips, any other major financial commitments you may have. Everything that you would normally need to provide when applying for a loan it is always recommended to get it together in a case your new lender wants it.

4. Talk to a Professional

When it comes to refinancing any type of loan it is always best to speak to a professional. A professional loan broker will tell you where you stand and will help you get your hands on the best deal for your next loan.

The benefit of speaking to a loan professional is they will guide you on your way. Some loan professionals will organise and complete the entire process for you on your behalf. However, you do need to keep in mind using a broker will cost you some money.

5. Apply for a New Car Loan

Once you have spoken to your current lender, have your documents ready, shopped around and spoken to a loan professional, it is now time for you to apply for your next car loan.

Apply for refinance through your shortlisted lenders. After your initial application, you should expect to hear back from the lender within the next 2 business days, however response times do vary from lender to lender.

Once everything has been approved, your new lender will pay your existing loan amount out to previous lender after which you will now be switched over to your new agreement. The entire re-financing process can be completed in a little less than a week!

Final Word,

Refinancing is the best way to get a better rate on your current car loan. Before you begin applying for a better rate, it is important that you understand the process and you prepare yourself as best as possible. The 5 steps presented above are what you should expect when refinancing your car loan in Australia.

We hope you enjoyed reading this article. To read more articles like this, please visit the Shop for Cars latest news page here.

About Shop for Cars,

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DISCLAIMER: This is all based on opinion please research and consult with all relevant parties to make the best-loan decision.