Car loans aren’t always locked in once you’ve signed on the dotted. If you were approved a few years ago but your finance isn’t working for you today, refinancing your car loan could be a smart move. It could see you free up cash flow, save money and take advantage of better terms.

But how do you know when to pull the trigger? Here are 7 common signs it might be worth adjusting your car loan.

1. Your Interest Rate Is Higher Than Current Market Rates

Interest rates aren’t set in stone. They shift over time.

If you took your loan out when rates were high, you might be paying more than necessary. This is often the case for borrowers who started out with dealership finance or a low doc option. Refinancing your loan could give you a lower rate, reducing monthly repayments and the total interest paid. Even a small decrease can make a big difference.

2. Your Financial Situation Has Improved

Not everyone applies for a loan with a strong credit history, high income or well established business. If you were approved for your loan at a time of less financial security but things have since stabilised, lenders will now see you as lower risk.

That can unlock shorter terms and a low interest rate for your car loan, helping you pay it off sooner and for less.

3. You Want to Change the Loan Term

Our crew knows that you would’ve thoroughly planned for your car financing. But sometimes things don’t work out.

If your repayments are putting pressure on your budget, refinancing gives you flexibility:

• Extend your loan term, reducing monthly repayments and improving cash flow (NOTE: this could mean paying more interest over time)

• Shorten your term to get debt free quicker and save on interest

Whichever you choose, adjusting your term can better align car financing with your goals and income.

4. You’re Looking to Consolidate Debt

If you’re balancing multiple repayments, refinancing could be part of a wider debt consolidation strategy. Our lenders will allow you to roll several debts into a single repayment, helping you:

• Simplify your finances

• Secure a lower average interest rate

• Get a clearer view of your overall repayment schedule

If this sounds like something you’d be interested in, speak with our crew and they’ll run you through the pros and cons.

5. Your Current Loan Has Restrictive Features or Fees

Finding the right car loan isn’t just about a low interest rate. There are plenty of other elements and fees you need to consider:

• Ongoing monthly or annual account fees

• Penalties for early repayment

• Inflexible repayment schedules

• No redraw or offset options

If your loan is rigid and no longer suits your lifestyle, refinancing can create a structure that works better for you. Whether that means more flexibility or a simpler fee setup, our crew can make it happen.

6. Your Business Needs Have Changed (For Commercial Borrowers)

Many buyers finance their vehicle for personal use but end up using it for business. That’s a great reason to switch up your car loan. If you’re an ABN holder or sole trader, adjusting your finance to a commercial car loan can reveal new tax benefits and structures.

And it works the other way around, too. If you’re no longer using the vehicle for your business, a simpler ‘personal’ car loan might serve you better.

7. You’re Coming to the End of a Balloon Payment Term

Refinancing is also a great way to manage a balloon payment. If you opted for this structure, rolling to balloon amount into a new loan with manageable repayments lets you avoid any scrambling or dipping into savings.

It’s a common strategy that keeps cash flow steady and fends off any financial stress.

What to Keep in Mind Before Refinancing

Like we said before, don’t change your car loan all for the sake of a low interest rate. Refinance isn’t for everyone, so consider:

• If your current loan has any break or early exit fees

• If what you’ll save on interest will outweigh any refinancing fees

• How the total repayment figures will impact your bottom line

• How a broker (like Loans Unlimited) can help you navigate changing loan structures

Apply Today and Take the First Step Toward More Manageable Car Financing

At Loans Unlimited, our crew help ordinary Aussies and business owners determine whether or not refinancing makes sense. If it does, we’ll do everything we can to find a new structure that supports your goals. Whether you’re after a low interest rate, more flexibility or less fees on your car loan, we’re here to guide you through it.

To start looking at your options, enquire today.