Free Refinance Calculator Auto
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Reviewed by Calculator Editorial Team
Use our free auto refinance calculator to estimate potential savings when refinancing your car loan. Simply enter your current loan details and the new loan terms you're considering, then click "Calculate" to see how much you could save each month.
How to Use This Calculator
To use this auto refinance calculator:
- Enter your current loan balance (the total amount you owe on your auto loan)
- Enter your current interest rate (the APR you're currently paying)
- Enter the remaining term of your current loan (how many months are left on your loan)
- Enter the new interest rate you're considering (the APR you'd get with the new loan)
- Enter the new loan term you're considering (how many months you'd like the new loan to last)
- Click "Calculate" to see your estimated savings
The calculator will show you your current monthly payment, your new estimated monthly payment, and the difference between the two. It will also show you the total interest you'll pay under both scenarios.
How Auto Refinancing Works
Auto refinancing is the process of replacing your current auto loan with a new one, typically to get a lower interest rate or better terms. Here's how it works:
- You apply for a new auto loan from a lender
- The lender evaluates your credit and the value of your car
- If approved, you receive a new loan with better terms
- You pay off your old loan with the proceeds from the new loan
- You now have a new loan with better interest rates and terms
There are several reasons why you might want to refinance your auto loan:
- To get a lower interest rate and save money on interest payments
- To shorten the loan term and pay off the loan faster
- To consolidate multiple auto loans into one
- To take advantage of special financing offers
Before refinancing, make sure you understand the costs and benefits. Refinancing may not always be the best option, especially if you're close to paying off your current loan.
Worked Example
Let's look at an example to see how auto refinancing can save you money. Suppose you have a car loan with these details:
| Current Loan Balance | $25,000 |
|---|---|
| Current Interest Rate | 6.5% |
| Remaining Loan Term | 48 months |
Your current monthly payment would be approximately $552.60. Now let's say you qualify for a new loan with these terms:
| New Interest Rate | 4.5% |
|---|---|
| New Loan Term | 48 months |
With these new terms, your monthly payment would be approximately $475.00. That's a savings of $77.60 per month, or $3,724.80 over the life of the 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 (annual rate ÷ 12)
- n = number of payments (loan term in months)