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Car refinancing allows you to replace your current finance deal with a new one. How to refinance a car is easy and all you need to do is apply! One of our friendly team will then be in touch with a financial decision for you. If one of our lenders wishes to help you refinance your car, we’ll talk you through your options and if it would be your best decision. Refinancing a car loan is a fast and easy process with UK Car Finance!

What is refinancing a car loan? 

Refinancing a car loan is when you use a new loan to pay off the value of your existing loan. Choosing to refinance your car finance can be beneficial for many drivers. If your situation has changed since you first took out a car loan, you may find it helpful to refinance your car and put yourself in a better situation. You could use car refinancing to lower the monthly payments, extend or reduce the loan term or reduce your interest rate. 

woman holding new finance deal after refinancing

Can I refinance my car? 

A common car finance question we get asked is ‘Can I refinance my car?’. Just like any form of finance or loan, you will need to receive approval from a lender and it can never be guaranteed you’ll get approved. If you’re eligible for a car loan we’ll be in touch with a finance decision for you when you apply.

If you currently have a car on finance, you can make a free application with us and see if one of our fantastic UK lenders would like to help you refinance your car. 

What are the benefits of refinancing a car loan? 

  • Lower your interest rate – If your situation has changed since you first took out finance e.g. your credit has improved, you could get offered a lower interest rate when you refinance.
  • Lower monthly payments – If you’re struggling to keep on top of your car finance payments, you could lower your monthly payment by choosing a lower interest rate or lengthening the term length.
  • Pay your loan off faster – You can choose to shorten the loan term length and pay off your finances quicker. Shortening the term length will make your monthly payments higher though.

How do I apply? 

Refinancing a car loan with us is easy! Our fast application form takes all the info we need from you to automatically send you off to our lending panel. Once we’ve received your application, we aim to have a refinance decision back to you within the first 24 hours of applying! One of our friendly team will be in touch and if one of our lenders wishes to offer you a car refinance deal, we’ll get the ball rolling. 

man sitting at computer applying

1. Make a free application. 

person from uk car finance calling you

2. We’ll be in touch. 

electric car

3. Refinance your car. 

What to consider before refinancing:

Refinancing your car is a great way to get a better deal than you currently have. However, not all applicants will be suitable for an improved car loan and there are a few considerations you should make first. 

1. Check your credit report. Many drivers may want to refinance their loans if their credit has improved since they first took out a car loan. A better credit score could get you a lower interest rate and help you to save money. Before you commit to refinancing a car, you should first check your credit report to see where you fall on the credit scale. If your credit score has dropped, it may be a good idea to improve your credit score first before trying to refinance as you may not get a better deal.

2. Dig out your car finance agreement. Before you can replace your current car loan, you need to understand what you’re currently paying for. When you sign your car finance agreement you will receive a copy to your email or your home address. If you can’t find your current agreement, you can contact your finance lender to request one. Once you have the agreement, take a look at the current interest rate you have, and what your monthly payments are, and contact the lender for a settlement figure. This can help you to compare new deals and see if refinancing would be worth it. 

man and woman refinance car together

3. Check the loan term length. Refinancing a car loan can usually be the most cost-effective once you have made more than 50% of your finance payments. If you’re early on in your car finance agreement, it may not be worth trying to refinance as you won’t have paid off much of the loan. Try waiting till you’re over the halfway mark before you start applying.

4. Check current interest rates. When you take out car finance, the interest rate you are offered will be calculated by several factors. One such factor is the current rate of interest set by the Bank of England. When interest rates in the UK are higher, your car finance rate will also be higher. Keep this in mind when comparing refinance deals and it may be best to wait until UK interest rates have dropped.

Can I refinance a PCP balloon payment? 

Yes! Our lenders can help you to refinance a PCP balloon payment. If your PCP deal is coming to an end but you can’t afford to pay the balloon payment, you could consider refinancing the lump sum to keep driving the car you love! 

Find out more on our refinance a PCP balloon payment page

Refinance your car today!

Make a free no-obligation application today with NO effect on your current credit score! Once you’ve applied, one of our friendly team will be in touch. 

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