Auto Loan Calculator Refinance
'/%3E%3Ccircle cx='48' cy='39' r='19' fill='%23f2c9a5'/%3E%3Cpath d='M27 35c3-16 39-17 42 2-8-8-27-9-42-2z' fill='%23374151'/%3E%3Cpath d='M21 86c5-24 49-28 56 0z' fill='%232563eb'/%3E%3Ccircle cx='41' cy='41' r='2' fill='%23111827'/%3E%3Ccircle cx='55' cy='41' r='2' fill='%23111827'/%3E%3Cpath d='M42 52c4 3 9 3 13 0' stroke='%2392400e' stroke-width='3' fill='none' stroke-linecap='round'/%3E%3C/svg%3E)
Reviewed by Calculator Editorial Team
Refinancing your auto loan can save you money by lowering your interest rate or changing your loan term. Use our auto loan refinance calculator to estimate your potential savings and compare different refinancing options.
How to Use This Calculator
Enter your current loan details and the new loan terms you're considering. The calculator will show you your estimated monthly payment, total interest paid, and savings compared to your current loan.
Monthly Payment Formula
P = L × (r(1 + r)^n) / ((1 + r)^n - 1)
Where:
- P = Monthly payment
- L = Loan amount
- r = Monthly interest rate (APR/12)
- n = Number of payments (term in months)
How Auto Loan Refinancing Works
Refinancing your auto loan involves replacing your current loan with a new one, typically with better terms. There are two main types of auto refinancing:
Rate-and-Term Refinancing
This is the most common type where you get a new interest rate and/or loan term. You can:
- Lower your interest rate to reduce monthly payments
- Shorten your loan term to pay off the loan faster
- Extend your loan term to lower monthly payments
Cash-Out Refinancing
This allows you to take out additional cash while refinancing. You must have good credit to qualify for this option.
Important Considerations
Refinancing typically requires good credit and may have closing costs. Always compare the total cost of refinancing with the potential savings to make an informed decision.
Key Factors to Consider
When deciding whether to refinance your auto loan, consider these factors:
Interest Rate
The most significant factor is the interest rate. A lower rate will save you money over the life of the loan.
Loan Term
Shorter terms mean higher monthly payments but pay off the loan faster. Longer terms mean lower monthly payments but take longer to pay off.
Closing Costs
Refinancing typically has closing costs (2-5% of the loan amount) that can offset some savings.
Credit Score
Your credit score affects the interest rate you qualify for. A higher score means better rates.
Loan Balance
Refinancing is most beneficial when your loan balance is high and you can save money on interest.
Example Calculation
Let's say you have a $20,000 auto loan with a 5% APR and a 60-month term. Your current monthly payment is $372.44.
If you refinance to a 3.5% APR with the same term, your new monthly payment would be $324.66, saving you $47.78 per month.
| Loan Detail | Current Loan | Refinanced Loan |
|---|---|---|
| Loan Amount | $20,000 | $20,000 |
| Interest Rate | 5.0% | 3.5% |
| Term | 60 months | 60 months |
| Monthly Payment | $372.44 | $324.66 |
| Total Interest Paid | $1,449.44 | $749.88 |
| Total Cost | $21,449.44 | $20,749.88 |
In this example, refinancing saves you $1,449.44 over the life of the loan.
Frequently Asked Questions
How long does it take to refinance an auto loan?
The process typically takes 30-45 days, but it can vary depending on your lender and whether you need an appraisal.
Can I refinance a car loan with bad credit?
Yes, but you may need to look for specialized lenders that offer loans to borrowers with bad credit. Interest rates will typically be higher.
What are the closing costs for refinancing an auto loan?
Closing costs typically range from 2-5% of the loan amount and may include fees for appraisal, credit report, title search, and processing.
Is it better to refinance or extend my auto loan?
It depends on your financial situation. Refinancing may lower your monthly payment but could increase the total interest paid. Extending may lower your monthly payment but increase the total cost.