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What happens to my old loan?
It gets paid off in full and closed. At settlement, the new lender pays your old lender the payout figure (the balance plus any break fee) directly. You don't move any money yourself.
By Leverage Finance · Updated 17 July 2026
Once the payout clears, the old contract ends: no more repayments to the old lender, and their security registration over the car is released. Your credit file shows the loan as closed and repaid in full, which is positive history.
Two pieces of housekeeping are worth doing: cancel any automatic payment you'd set up yourself to the old lender (direct debits they control stop on their side), and keep the closure confirmation they send you.
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