Car loan refinancing means switching out your current car loan for a new one, usually with a different lender who can offer you better terms.
Think of it like this…
Your new lender pays off what you still owe on your old loan. Then you start fresh with them under a new agreement, hopefully at a lower interest rate or with repayments that actually fit your life.
It’s similar to refinancing a home loan, but way simpler and usually much faster to sort out.
The entire process happens in the background while you keep driving your car. No need to trade it in. No need to start over with a new vehicle purchase. You’re just getting a better deal on the loan you already have.
In this article, you’ll learn exactly when refinancing makes sense, how the process works, what to watch out for, and how Fido Finance helps everyday Australians refinance smarter – saving money, time, and reducing stress.
Want to know if refinancing could save you money?
Give our team a call on 13 FIDO (13 34 36) and we’ll walk you through your options in plain English.
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Jane's old loan
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Jane's new loan (after refinancing with Fido Finance)
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✅ Jane saves $115 per month and $7,940 in total interest
Table of Contents
Why should you refinance your car loan?
Most Australians refinance to lock in a lower interest rate and save money each month. But that’s not the only reason to consider it.
Here’s why refinancing makes sense:
You can lower your interest rate by 1.5-2% or more
Even a small drop in your rate can save you hundreds, sometimes thousands, over the life of your loan. If rates have come down since you first borrowed, or if your credit score has improved, you might qualify for much better terms now.
(And let’s be honest… in this economy, every dollar counts. That’s money that could go toward actual fun things. Like coffee that doesn’t come from a servo.)
Your credit score has improved
Been making payments on time for the past year? Your credit score has likely gone up. That means lenders see you as less risky, which often translates to better rates and more flexibility.
You want to optimise your cash flow
Maybe your income has changed. Maybe you’ve got other financial priorities. Refinancing can help you restructure your loan to free up breathing room in your budget, whether that’s through lower monthly repayments or a shorter loan term that gets you debt-free faster.
Your car’s value still exceeds the loan balance
If your car is worth more than what you owe (positive equity), you’re in a strong position to refinance. Lenders like seeing that buffer.
You’re planning to keep the car for a while
Refinancing makes the most sense when you’re not planning to sell or trade in soon. If you’ve got another year or two (or more) left with your current vehicle, the savings really add up.
You can comfortably afford the new rate and repayment structure
This one’s important. Refinancing should make your life easier, not add stress. At Fido Finance, we make sure the new terms work for YOUR situation, not just what looks good on paper.
Paying off your loan early can be a smart move — but only if you know what fees or penalties might apply. Our guide to car loan early repayment breaks down what to check before you make that last big payment, and how to make sure you actually come out ahead.
When refinancing doesn't make sense
Just as important as knowing when TO refinance is knowing when NOT to.
There’s less than 12 months remaining on your current loan
If you’re almost done paying off your car, refinancing probably won’t save you enough to justify the effort and any associated fees.
(You’re basically on the home stretch. Keep going!)
The fees outweigh your savings
Some lenders charge exit fees, establishment fees, or other costs. If these eat up most of your potential savings, it’s not worth switching.
Your car is too old or has taken a major depreciation hit
Lenders have limits on the age and value of vehicles they’ll refinance. If your car’s getting up there in years or has significantly dropped in value, you might have fewer options.
Not sure if refinancing makes sense for your situation? Let’s chat.
Call 13 FIDO (13 3436) for a no-pressure conversation about your options.
How soon can you refinance a car loan?
Technically? You can refinance anytime.
But here’s what we usually recommend…
Give it at least 6-12 months of consistent, on-time payments first. This does two important things:
- Firstly, it builds up your payment history, which helps your credit score
- Secondly, it shows new lenders you’re reliable with repayments
That stronger credit profile often means access to better rates when you do refinance. So while you CAN refinance earlier, waiting a bit usually gets you a better deal.
That said, if interest rates have dropped significantly or your financial situation has improved dramatically, it might make sense to explore your options sooner.
Wondering whether to lock in a set rate or ride the wave with something more flexible? Our quick read on fixed vs variable rate car loans explains the key differences, so you can choose the setup that best fits your goals (and your budget).
Steps to refinance your car loan
(the right way)
Refinancing doesn’t have to be complicated. When you know what’s needed upfront, the whole process is pretty straightforward.
Here’s exactly what you’ll need to do (or what we’ll handle for you if you work with Fido Finance):
Step 1: check your current financial position
Make sure your accounts and repayments are up to date. If you’ve fallen behind anywhere, get that sorted first. It’ll maximise your savings potential when you refinance.
Step 2: get a payout letter from your existing lender
This confirms exactly how much you still owe. Different lenders have different processes for this. Some provide it instantly. Others might take two to three weeks or even longer.
(This is one of those things your Fido Finance broker can assist with, by the way. We know exactly how to speed those requests along.)
Step 3: know your car’s current value
Understanding your vehicle’s trade-in value versus its private sale value helps you know where you stand.
Step 4: let Fido Finance do the heavy lifting
Instead of approaching 30+ lenders individually, filling out endless applications, and trying to compare complex loan structures on your own…
You make one call to us.
Here’s what makes Fido Finance different
Access to 30+ trusted lenders
We’ve built relationships with a wide network of lenders, which means more options and better rates for you. Our team personally reviews every application and negotiates on your behalf to find the best possible deal.
Award-winning service
We’ve been voted Best Car Loans on ProductReview for three years running (2023, 2024 & 2025). Plus, we’ve got over 900 reviews on Trustpilot with an overall 5-star rating and a 4.9-star average across over 1,100 Google Reviews.
Most approvals within 24 hours
When you’re ready to refinance, you shouldn’t have to wait weeks for an answer. Our streamlined process means most of our clients get same-day responses.
100% Australian-based team
Real humans. Real expertise. Real conversations. No overseas call centres. Just experienced brokers who actually care about getting you sorted.
Over $550 million in loans approved
We’ve helped thousands of Australians save money on their car loans. We know this process inside and out.
But honestly? The biggest difference is how our brokers actually show up for you.
When you work with Fido Finance, you get your own personal broker. Not a different person every time you call. Not someone who has to ask you to “explain everything again from the beginning.”
One broker. Your broker. Someone who knows your situation, remembers your conversation, and is invested in getting you sorted.
They stay with you through every step – chasing down payout letters, clarifying confusing lender requirements, keeping you updated, and making sure nothing falls through the cracks.
When questions come up (and they always do), you’ve got someone in your corner who’ll actually pick up the phone and give you straight answers.
Here’s what that looks like in real life
Verified Trustpilot Review (Richard)
“We were looking to refinance our car loan, having come to the end of our 4 year lease (from new) and deciding to keep the car.
We discovered Fido Finance and from the first interaction with Reece everything was transparent and easy – Reece ensured we were kept up to date with the progress of the application, and was always quick to return calls and clarify any details that we were unsure of. Naturally he was eager to get us the best deal possible and was not pushy or intrusive with his method of comms, which made the decision making and understanding on our part very easy.
The process of applying and finalising the loan was straight forward and the rate provided was competitive (at a time where rates aren’t exactly the lowest). Lastly, on completion of the application the outstanding part of the existing loan was paid off and we received confirmation via email and over the phone, as advised by Reece.
Overall the process was relatively stress free and I would recommend, and consider using Fido Finance again.”
You can read hundreds more verified reviews like this on Trustpilot.
If you’re curious about who’s behind the name, check out Our Story.
You’ll see how Fido Finance started, what we stand for, and why thousands of Australians trust our team to help them save money and stress on their car loans.
How long does it take to refinance a car loan?
The timeline really depends on how quickly your current lender provides that payout letter.
Some lenders get it done instantly. Others take a couple of weeks or even longer.
(This is where having a Fido Finance broker helps – we know exactly which lenders are fast and which ones need extra nudging.)
Once we have that payout letter and your application is submitted, most refinance approvals come through within 24-48 hours.
The settlement process after approval typically takes another few days to a week, depending on the lender.
From start to finish? Most of our clients are refinanced and enjoying better terms within 2-4 weeks.
Verified Trustpilot Review – Shaun Anderson
Fido Finance “looked after us to refinance a personal loan and also get a new car loan. All in all a very good and easy experience. Would highly recommend.”
Important things to consider when refinancing
Before you jump into refinancing, there are a few things worth thinking through.
Keep the loan term in mind
Extending your loan term might lower your monthly repayments, but you’ll pay more interest overall. Shortening your term increases repayments but saves you money long-term and gets you debt-free faster.
We help you find the sweet spot that works for your budget AND your goals.
Factor in ALL the fees
There are three types to watch for:
- Once-off fees (establishment, application, settlement)
- Ongoing fees (monthly account keeping, annual fees)
- End-of-loan fees (early repayment penalties, discharge fees from your old lender)
You need to compare these costs against your potential savings. Sometimes a slightly higher rate with lower fees actually saves you more money.
If you’re considering paying off your loan early, make sure to understand any early repayment penalties. Your Fido Finance broker will walk you through all of this so there are no surprises down the track.
Consider your other debts and financial commitments
Refinancing your car loan might be a good opportunity to look at your overall financial picture. Sometimes consolidating multiple debts into one manageable payment makes more sense than just refinancing the car loan alone.
We’re here to help you see all your options and choose what works best for YOUR situation.
(Because let’s face it… juggling five different payments each month is nobody’s idea of a good time.)
Have questions about fees or loan terms? We’ll break it all down for you.
Call 13 FIDO (13 34 36) for straight answers.
Looking for a fresh start with your next car? Explore our Car Loans page to see how we compare options from 30+ trusted lenders — finding a deal that actually works for you, not just the banks.
Make your next move your best move
Look, refinancing isn’t the right move for everyone. But if you’re paying more than you need to on your car loan, or if your current repayments are squeezing your budget tighter than you’d like…
It’s worth a conversation.
Here’s what sets Fido Finance apart when you’re ready to refinance:
We make sure your new loan meets all your desired criteria – lower repayments, manageable payments, best rate – and then some.
That means flexibility with making additional payments without penalties. The option of a redraw facility if you need to access extra payments you’ve made. Terms that actually work with your life, not against it.
Our team will look at your current situation, run the numbers, and give you honest advice about whether refinancing will actually save you money. No pressure. No obligation. Just straight answers.
Because at the end of the day, we’re here to help everyday Australians refinance smarter – saving money, time, and reducing stress.
Ready to see if refinancing makes sense for you?
Call 13 FIDO (13 34 36) or apply online to get started. Most approvals come through within 24 hours.
