How we dropped his weekly car repayments by 40%
When you have bad credit, securing a car loan usually means accepting a high interest rate.
You then have two choices:
- Passively make your repayments for the full loan term. Or,
- Proactively refinance the loan as soon as you qualify for a better deal.
If you spend 12 months making on-time payments, you can rebuild your credit profile and move to a much sharper rate.
You just have to know how to do it, and where you will get the best deal.
Scenario
A Western Sydney tiler originally came to us in January 2025.
Back then, he needed a $25,000 Mitsubishi Triton for work.
But with a paid telco default, a history of missed payments, and only one month at his job, his credit was in a rut.
We secured him a sub-prime loan at 21%. It wasn’t pretty, but it solved his immediate problem.
Fast forward 18 months, and he came back to us ready to look for better options.
The Roadblocks
- Negative Equity: His credit score had improved, but his car’s value had dropped. He still owed more on the old loan than the Triton was actually worth.
- LVR Caps: To completely pay out his old sub-prime loan, we needed a lender willing to approve a 135% Loan-to-Value Ratio (LVR). Most top-tier lenders have a hard cap at 130%.
The Gusto Strategy
While his vehicle had lost value, his personal financial position had improved considerably.
His old telco default had finally fallen off his credit report.
He also had a flawless 18-month repayment history on his current car loans and had secured a new job with a solid jump in salary.
We used this strong new profile to negotiate directly with a prime lender on our panel.
We knew this specific lender was willing to stretch their LVR limits to 135% for high-quality applicants with proven income.
The Result
We successfully refinanced his Triton and paid out the old 21% loan in full.
His new interest rate is an incredible 12.89%.
This rate drop instantly reduced his weekly car repayments by 40%.
Even better, having a prime lender on his credit file and significantly lower monthly expenses puts him in the perfect position for his next goal: applying for a mortgage with the Gusto Home Loans team.
The Takeaway
A high-interest car loan should only ever be a short-term stepping stone to a better place.
A good broker will track your progress and know exactly when your credit has improved enough to bypass strict valuation limits and save you thousands.