How to use this refinance calculator
- Enter your current loan balance, its APR and the number of months left. Your lender's statement or online account shows the payoff details.
- Enter the new APR and term from the refinance offer.
- Add any refinancing fees, such as title transfer or lender charges, and choose whether they're rolled into the new loan.
- Compare the monthly change, the total remaining cost of each loan and the net savings.
How it's calculated
Your current payment is calculated from your balance, current APR and remaining months using the standard loan formula: payment = P × r ÷ (1 − (1 + r)−n), where r is the APR divided by 12 and then by 100. The new payment uses the same formula with the new APR and term. If fees are rolled in, they're added to the balance first.
The total remaining cost of each option is its monthly payment times the number of payments left. Net savings is the current loan's remaining cost minus the new loan's. If you pay fees upfront rather than rolling them in, they count toward the cost of refinancing. The calculator warns you when a longer term means paying more interest overall.
Example: you owe $22,000 at 9.5% APR with 48 months left. Your payment is $552.71, and the remaining payments total $26,530.03. A refinance at 6.0% for 48 months with $300 in fees rolled in gives a new balance of $22,300 and a payment of $523.72. That's $28.99 less a month and $1,391.66 less in total. Stretching the same offer to 60 months drops the payment to $431.12, but net savings shrink to $662.74. At 72 months, the payment falls to $369.58, yet the total of $26,609.43 is about $79 more than keeping your current loan.
Before you refinance
- Get quotes from several lenders, including credit unions, within a short period so the inquiries count as one.
- Ask your current lender whether there's a prepayment penalty, and include it in the fees if there is.
- Match the new term to the months you have left if you want the most savings, and choose a longer term only if you need the lower payment.
- Check your car's value. Lenders may decline or charge more when you owe more than the car is worth.
- Keep paying the old loan until the lender confirms it has been paid off, so you don't miss a payment during the switch.
Good to know: Most auto loans use simple interest, so paying extra toward principal reduces interest without refinancing. If the savings here are small, an extra payment each year may achieve a similar result.
Frequently asked questions
When does it make sense to refinance a car loan?
Refinancing usually pays off when you can get a noticeably lower APR, for example because your credit has improved or rates have dropped since you bought the car, and when fees are small compared with the interest saved. It helps most early in a loan, while the balance is still high.
Can refinancing lower my payment but cost more overall?
Yes. If you stretch the remaining term, you make more payments and may pay more interest in total even at a lower rate. Always compare the total remaining cost, not just the monthly payment.
Does refinancing hurt my credit score?
Applying usually causes a hard inquiry, which can lower your score slightly for a short time. Rate shopping with several lenders within a short period is typically treated as a single inquiry by common scoring models.