Auto Refinance with Cash Out Calculator

How Auto Refinance With Cash Out Works

Auto refinancing with cash out involves taking out a new auto loan to pay off your existing auto loan while receiving additional funds. This process can help you lower your interest rate, reduce monthly payments, and access cash for other expenses.

Key Considerations

• Lower interest rates can save you money over the life of the loan
• Cash out provides additional funds that can be used for home improvements, debt consolidation, or other expenses
• Refinancing may require a credit check and could impact your credit score
• You'll need to meet the lender's eligibility requirements, including good credit history and sufficient income

When to Consider Refinancing With Cash Out

Refinancing with cash out might be a good option if:

• You have good credit and can qualify for a lower interest rate
• You need additional funds for a major expense
• You want to reduce your monthly car payment
• You're planning to keep your current vehicle for several more years

Potential Drawbacks

There are also some considerations to keep in mind:

• Closing costs can add up, potentially negating some of the savings
• You'll be responsible for two payments during the refinancing period
• If you sell the vehicle before the new loan is paid off, you may owe more than the car is worth

Formula Used

The calculator uses the following formula to estimate the impact of refinancing with cash out:

The calculator also calculates the total interest paid over the life of the loan and the amount of cash you'll receive from the refinancing.

Worked Example

Let's look at an example to illustrate how the calculator works. Suppose you have an existing auto loan with the following details:

• Current loan balance: $25,000
• Current interest rate: 8% APR
• Current loan term: 60 months

You want to refinance with the following new terms:

• New interest rate: 5% APR
• New loan term: 72 months
• Cash out amount: $5,000

Using the calculator, you would:

1. Enter the current loan balance ($25,000)
2. Enter the current interest rate (8%)
3. Enter the current loan term (60 months)
4. Enter the new interest rate (5%)
5. Enter the new loan term (72 months)
6. Enter the cash out amount ($5,000)
7. Click "Calculate"

The calculator would then show you:

• Your new monthly payment would be approximately $325
• You would save about $1,200 per year in interest payments compared to your current loan
• The total interest paid over the life of the new loan would be about $1,500

This example shows how refinancing with cash out can help you lower your monthly payments and save on interest while accessing additional funds.