A lower repayment on a refinanced car loan does not automatically mean a cheaper loan. Compare what you would pay from today under each option, including switching fees, the new end date and any final balloon payment.
Start with the loan you already have
Ask your current lender for a dated payout quote and details of any early-exit costs. Separately, request the remaining repayment schedule if you keep the existing loan, including any final lump sum.
These answer different questions: what it costs to close the loan now, and what remains payable if you continue. Our early car-loan payout checklist explains the paperwork to request.
Keep the quote’s expiry date beside your comparison. If settlement moves, ask whether the payout figure needs updating rather than relying on an old balance.
Put the two finish dates side by side
ASIC’s Moneysmart refinancing guidance warns that extending a loan can increase total cost even when repayments fall. A lower rate does not remove that risk.
Ask for one proposed quote using your remaining loan term and another using the longer term being offered. Write the last repayment date next to each regular repayment so the extra time stays visible.
A practical question is: “How much of the repayment reduction comes from the rate, and how much comes from taking longer to repay?” Ask for the answer in dollar amounts across the full remaining period.
Include fees and the final payment
Moneysmart’s car-loan guide identifies establishment, broker and ongoing fees as costs to check. It also explains that a balloon leaves a lump sum due at the end and generally increases total loan cost despite smaller regular repayments.
Ask which switching costs are paid upfront and which are added to the new loan. Count each cost once; do not add an upfront fee again if it is already included in a quoted total. Keep any cash contribution separate too.
The Moneysmart personal-loan calculator can help explore repayment periods, but its estimates exclude establishment and account fees and do not assess affordability. Use the written loan figures for your final comparison.
If the real problem is repayment pressure
If meeting current repayments is difficult, contact your lender’s hardship team rather than assuming another loan is the answer. Our guide to managing car-loan repayments after an income drop covers practical first steps.
Aussie Loans is a finance broker. Our team can discuss your refinancing questions and the figures needed to compare options. Approval and savings are not guaranteed; lender criteria, rates and fees vary.
General information only, checked 24 October 2026. Consider your circumstances and the actual contract terms.
