Change Car Loan – Regain Control Fast (2026)

Have you ever felt trapped by your current car loan, wondering if there's a better deal out there? You're not alone. Many Australians find themselves locked into loans that no longer suit their financial circumstances or simply aren't competitive in the current market. The good news is, you have options. It's possible to change your car loan to another bank, potentially saving you money and giving you more favourable terms.

Understanding Car Loan Refinancing

Refinancing a car loan involves paying off your existing loan and replacing it with a new one from another lender. This can be an attractive option if you've found a lender offering a lower interest rate, or if your financial situation has improved, allowing you to qualify for better terms. The goal of refinancing is to reduce your monthly repayments, decrease the overall interest paid over the life of the loan, or both.

Current Market Rates and Options

In 2026, car loan interest rates in Australia typically range from 6.49% to 12%, depending on factors such as the borrower's credit score, loan term, and the lender's specific policy. Lenders often offer more competitive rates to borrowers with strong credit histories and stable incomes.

When considering refinancing, it's important to compare the offerings from multiple lenders. Here's a comparison table illustrating potential differences:

As a mortgage broking company, Esteb and Co has access to over 83 lenders, providing a wide array of options to find a loan that best matches your needs.

Steps to Change Your Car Loan to Another Bank

Changing your car loan to another bank may seem daunting, but by following these steps, you can facilitate a smooth transition:

1. Assess Your Current Loan: Review your existing loan details, including the remaining balance, interest rate, and any fees associated with early repayment.
2. Check Your Credit Score: Obtain a copy of your credit report to ensure there are no errors and to understand your creditworthiness.
3. Research and Compare Offers: Use comparison tools and consult with brokers like Esteb and Co to explore options from multiple lenders.
4. Calculate Potential Savings: Use a loan calculator to determine how much you could save by refinancing, taking into account any exit fees from your current loan.
5. Apply for Pre-Approval: Once you've selected a lender, apply for pre-approval to lock in the interest rate and terms.
6. Finalise the Loan: Provide the required documentation, such as proof of income and identification, to the new lender for final approval.
7. Pay Off Your Existing Loan: The new lender will typically handle the process of paying off your existing loan, transitioning you smoothly to the new terms.

Tips and Considerations

• Consider Fees: Be aware of any exit fees from your current loan and application fees for the new loan. These should be factored into your overall cost savings.
• Loan Term Implications: Extending the loan term can lower monthly repayments but may increase the total interest paid.
• Check for Hidden Costs: Ensure there are no hidden costs in the new loan agreement that could negate the benefits of refinancing.
• Use a Broker: Leverage the expertise of a broker like Esteb and Co to navigate the refinancing process and access a wide range of lenders.
• Timing: Consider refinancing when interest rates are low to maximise savings.

Frequently Asked Questions

1. Can I refinance my car loan with bad credit?
Yes, but options may be limited, and interest rates could be higher. Improving your credit score before refinancing is advisable.

2. How much does it cost to refinance a car loan?
Costs can include application fees, exit fees from the existing loan, and possibly valuation fees. These vary by lender.

3. How long does the refinancing process take?
Typically, the process can take anywhere from a few days to a few weeks, depending on the lender and your preparedness.

4. Is there a penalty for paying off my car loan early?
This depends on your current loan agreement. Some loans have early repayment fees, which should be considered when refinancing.

5. Can I change my car loan to a personal loan?
Yes, you can refinance your car loan into a personal loan, though this may result in higher interest rates.

6. Will refinancing affect my credit score?
Applying for refinancing can lead to a temporary dip in your credit score due to the hard inquiry, but successful refinancing can improve your credit by reducing monthly costs.

7. Can I refinance with the same lender?
Yes, you can, but it’s wise to compare offers from different lenders to ensure you’re getting the best deal.