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Can you pay off your car loan early?

Find out if you can save time and money by repaying your car finance early.

Like other types of loans, car loans generally require you to make repayments over a set period of time. However, some lenders may allow you to make additional repayments or pay off your car finance early.

If you’re considering a car loan and want the ability to pay it off early, read our guide to see which loans allow you to do so, and if there are any fees you’ll need to pay.

What is the benefit of paying your car finance off early?

Repaying your car loan early can help lower the cost of your loan by limiting the amount of interest you pay. However, if you are in a position to repay your car loan early, you should always consider if any penalties or fees will apply. The cost of these may be bigger than the savings you would make from repaying the loan early.

How do early repayments work?

There are a few different types of early repayments:

  • Additional or lump sum payments. These are made during the loan term and do not result in your loan being repaid in full. Lenders still may place restrictions on these payments, especially with fixed rate loans.
  • Repaying your entire loan amount during a fixed rate period. This is where you will find the most restrictions applied. Repaying your entire loan early in this scenario involves paying whatever the loan balance is due to the lender during a fixed rate period, or where a fixed rate already applies to a loan. Here, break costs and administration fees are likely to apply to help the lender cover costs lost to them.

Which finance lenders allow early repayment?

BrandCar loan(s)Can you repay early without penalty?Fees that apply
AA MoneyAA Money Car Loantransparent--green-tickNo fee applies.
Admiral FinanceAdmiral Car LoanNo$40 may be charged for early settlement unless the loan is nearly complete. No fee applies for loans taken out after 1 July 2017.
ASBASB Car Loantransparent--green-tickNo fee applies.
Geneva FinanceGeneva Finance Car LoanNo$15 full prepayment fee applies when loan is settled early.
HarmoneyHarmoney Car Loantransparent--green-tickNo fee applies.
Heartland BankHeartland Bank Car LoanNo$7 early settlement fee applies, will be debited to the account when settled in full before its loan term.
KiwibankKiwibank Car Loantransparent--green-tickNo fee applies.
MyFinanceMyFinance Car FinanceNo$100 administration costs charge applies when you repay a loan in full before the final payment is due.
QuickLoansQuickLoans Car Loantransparent--green-tickNo fee applies
Swoosh FinanceSwoosh Finance Car LoanNoExtra charge applies which is calculated at the time the loan is repaid in full.
UDCUDC Car LoanNo$7 administration fee plus early prepayment charge that will be calculated by UDC.
WestpacWestpac Car Loantransparent--green-tickNo fee applies.
SimplifySimplify Car LoanNo$150 variation fee applies if you make an unscheduled part prepayment on your loan.
NectarNectar Car Loantransparent--green-tickNo fee applies.
Lending CrowdLending Crowd Car Loantransparent--green-tickNo fee applies.
The Lending PeopleThe Lending People Car LoanNoEarly settlement fees vary with lender.

What else should I know about car finance repayments?

Your car loan repayments will affect how you deal with your loan, so examine them carefully. Before you send through an application, make sure you have considered:

  • How often you make repayments. Lenders usually give you the option of making weekly, fortnightly or monthly repayments. This lets you line up payments with your budget.
  • The flexibility of the repayment options. Check whether you are able to make additional repayments without penalty or if there is a cap on how many additional payments you can make.
  • How you need to make repayments. Repayments are usually direct debited out of your account automatically. But you may be given other options for making repayments or to pay off your car loan early; such as electronic transfer or an in-branch deposit.
Making additional repayments on your car loan can be a helpful option that can help you save down the track, but it’s not the only feature that lenders have on offer. Remember to compare car loans across all fees, features and rates to find the right one for you.

Compare car finance now

Name Product Interest Rate (p.a.) Min. Loan Amount Max. Loan Amount Loan Term Establishment Fee
FAST QUOTE
Simplify Secured Car Loan
6.25% - 12.50%
$5,000
$500,000
12 - 60 months
$100 - $500
Eligibility: Must be 18+, a New Zealand resident or permanent citizen and have an income of at least $500 per month.
See how much you could borrow without affecting your credit score.
MTF Finance Secured Car Loan
8.70% - 20.70%
$2,000
$100,000
3 to 60 months
$376
Eligibility: Must be 18+, be an NZ citizen, resident or have a work visa, and have a regular source of income.
Secured car loans from $2,000.
FROM 6.99%
The Co-operative Bank Unsecured Personal Loan
6.99% - 19.99%
$3,000
$50,000
6 months to 5 years
$200
Eligibility: Be 18+, an NZ citizen/permanent resident, or have a valid work visa.
Floating-rate, unsecured personal loans from $3,000.
Kiwi Car Loans Secured Loan
6.95% - 19.95%
$5,000
$500,000
1 to 7 years
$195 - $995 depending on lender
Eligibility: Be 18+, an NZ citizen, permanent resident or have a work visa, and have an income of least $500 per week.
100% online secured car loans from $5,000
Lending Crowd Secured Car Loan
5.03% - 15.44%
$5,050
$200,000
3 or 5 years
$200 - $500 depending on the amount borrowed
Eligibility: Be a NZ resident/citizen and have a good credit score.
Borrow $5,050 to $200,000 for your chosen vehicle. 100% online with no paperwork or early repayment fees.
CarFinance2U Car Loan
8.95% - 23.95%
$5,000
N/A
1 - 5 years
N/A
Eligibility: Be at least 21 years old, have a valid NZ driver's licence and be an NZ citizen or permanent resident.
With a CarFinance2U secured or unsecured car loan you could get pre-approval for your next car in 30 minutes.
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