Penfed Credit Union Auto Refinance Calculator

Refinancing your auto loan with PenFed Credit Union can help you save money by taking advantage of lower interest rates or better loan terms. This calculator helps you estimate your potential savings by comparing your current loan with a new refinance option.

How to Use This Calculator

To use this calculator, you'll need information about your current auto loan and the refinance option you're considering. Here's what you'll need to enter:

Current loan balance
Current interest rate
Current loan term (in months)
New interest rate (offered by PenFed Credit Union)
New loan term (in months)

Once you've entered all the required information, click the "Calculate" button to see your estimated savings and compare the two loan options.

Formula Used

The calculator uses the following formulas to calculate your monthly payments and total interest paid:

Monthly Payment Formula

For both the current loan and the refinance option, the monthly payment is calculated using the standard loan payment formula:

M = P [ i(1 + i)ⁿ ] / [ (1 + i)ⁿ - 1 ]

Where:

M = monthly payment
P = principal loan amount
i = monthly interest rate (annual rate divided by 12)
n = number of payments (loan term in months)

Total Interest Paid

The total interest paid is calculated by multiplying the monthly payment by the number of payments and subtracting the principal loan amount:

Total Interest = (M × n) - P

Total Cost of Loan

The total cost of the loan is simply the sum of the principal and the total interest paid:

Total Cost = P + Total Interest

Worked Example

Let's look at an example to see how this calculator works. Suppose you have a current auto loan with these details:

Current loan balance: $20,000
Current interest rate: 6.5% APR
Current loan term: 60 months

You're considering a refinance offer from PenFed Credit Union with these terms:

New interest rate: 4.5% APR
New loan term: 72 months

Using the calculator, you would enter these values and click "Calculate". The results would show:

Metric	Current Loan	Refinance Option
Monthly Payment	$372.49	$283.33
Total Interest Paid	$1,127.86	$1,040.00
Total Cost of Loan	$21,127.86	$21,040.00
Savings	-	$88.86 per month

In this example, you would save $88.86 per month by refinancing with PenFed Credit Union. Over the life of the loan, you would save a total of $187.86 in interest payments.

Benefits of Refinancing with PenFed Credit Union

Refinancing your auto loan with PenFed Credit Union can offer several benefits, including:

Lower interest rates: PenFed Credit Union often offers competitive interest rates that can help you save money over the life of your loan.
Extended loan terms: You may be able to extend your loan term to reduce your monthly payments while paying the same total amount.
Improved loan terms: PenFed Credit Union may offer better loan terms, such as a lower APR or reduced fees.
Better customer service: As a credit union, PenFed Credit Union is member-owned and may offer more personalized service than traditional banks.

Important Considerations

Before refinancing your auto loan, consider the following factors:

Closing costs: Refinancing typically involves closing costs that may offset some of your savings.
Credit score impact: Refinancing may affect your credit score if you miss payments or close other accounts.
Loan eligibility: Make sure you qualify for the refinance offer and understand all the terms before proceeding.

Frequently Asked Questions

How often should I refinance my auto loan?

There's no set schedule for refinancing, but you should consider it when you can secure a lower interest rate, extend your loan term, or take advantage of other benefits. Generally, it's wise to refinance every 3-5 years or when your credit score improves significantly.

What are the closing costs for refinancing an auto loan?

Closing costs for refinancing typically range from 1% to 3% of the loan amount. Common fees include application fees, appraisal fees, credit report fees, and title fees. These costs can vary depending on the lender and your specific situation.

Will refinancing hurt my credit score?

Refinancing can temporarily lower your credit score if you close other accounts or have a hard inquiry. However, if you manage your accounts responsibly and make payments on time, the positive impact of a lower interest rate and improved loan terms can outweigh any short-term negative effects.

Can I refinance a car loan with bad credit?

It's possible to refinance a car loan with bad credit, but you may face higher interest rates and stricter terms. Some lenders specialize in bad credit refinancing and may offer more flexible options. It's important to shop around and compare offers before deciding.