Refinancing replaces one agreement with another. Lowering the monthly payment by extending the term almost always increases the total you repay. Check the total, not the instalment.
When refinancing is worth it
Refinancing is a good idea in a small number of specific situations and a bad idea in a few common ones. Work out which you are in before you apply.
| Situation | Verdict |
|---|---|
| Your rate is materially above current rates | Usually worth it. Keep the same end date and take the saving as a lower payment. |
| Your credit has improved since you borrowed | Often worth it. The original rate was priced on a worse profile than you now have. |
| You took dealer finance in a hurry | Worth checking. Convenience pricing at the point of sale is frequently expensive. |
| You cannot afford the current payment | Talk to us first. Refinancing to a longer term is one option, but not always the best one. |
| You are near the end of the term | Rarely worth it. Most of the interest has already been paid and fees can exceed the saving. |
| You want cash out of the car | Treat with caution. You are borrowing more against a depreciating asset. |
The extended-term trap
Dropping the payment by stretching a 3-year balance over 5 years feels like a saving and is usually the opposite. Model both before deciding.
Checking whether you would save
- 1Ask your current lender for a settlement figure. This is the exact amount to clear the loan today, including any early settlement adjustment.
- 2Note how many months remain on your current agreement.
- 3Model the settlement figure at our rate over the same remaining months in the calculator.
- 4Compare the total repayable, not the monthly payment.
- 5Subtract any arrangement fee from the saving. If what is left is small, staying put is the simpler answer.
Same term, honest comparison
Comparing at the same remaining term is the only way to see whether the rate is genuinely better. Change the term afterwards if you want to, deliberately.
What we can refinance
| Criterion | Standard position |
|---|---|
| Vehicle age at the end of the new term | Generally no more than ten years old. |
| Outstanding balance | Must be within our lending range and supported by the vehicle value. |
| Equity | The vehicle should be worth at least the balance. Negative equity is considered case by case. |
| Payment history | A clean recent record on the existing agreement. |
| Agreement type | Hire purchase and personal loans secured on the vehicle. Some lease and balloon products cannot be refinanced directly. |
| Title | Clear title, no insurance write-off marker, and no undisclosed finance. |
How the switch happens
Apply with the settlement figure
Along with your identity, income and the vehicle details.
Vehicle and title check
We confirm the vehicle exists, matches the description and carries no undisclosed finance.
Formal offer
Rate, term, monthly payment, total repayable and every fee, in writing before you sign.
We settle the old lender directly
You do not handle the money, which avoids the loan being partially cleared.
New agreement starts
First payment is normally the following month, and the old direct debit should be cancelled once you have confirmation.
Cancel the old payment only after confirmation
Cancelling the direct debit before the old lender confirms settlement can register as a missed payment on your credit file.
Documents you may also need
Vehicle Finance Rates
Indicative rates for new, used and electric vehicles, what moves the rate you are offered, and the fees that come with it.
Vehicle FinanceGet Pre-Approved
A decision in principle before you shop: what it tells you, what it does not commit you to, and what we need to give you one.
Vehicle FinanceBuying Through a Dealer
How dealer purchases, part-exchange and private sales work with our finance — and how to tell whether the dealer offer or ours is genuinely cheaper.
This document was last updated on 1 August 2026. We publish the current version here at all times; superseded versions are available on request.
If anything on this page is unclear, write to us and we will explain it.