Refi Auto Calculator

Use this refinance auto loan calculator to estimate your potential savings and new monthly payment amounts when considering refinancing your car loan. Compare different interest rates and loan terms to make an informed decision about whether refinancing is right for you.

How to Use This Calculator

Enter your current loan details and the proposed refinanced loan terms to calculate potential savings and new payment amounts.

Enter your current loan balance
Enter your current interest rate
Enter your current loan term in months
Enter your proposed refinanced interest rate
Enter your proposed refinanced loan term in months
Click "Calculate" to see your results

The calculator will show you your current monthly payment, your new monthly payment, the total interest paid over the life of the loan, and the total savings from refinancing.

Formula Used

The calculator uses the standard auto loan payment formula to calculate monthly payments:

Monthly Payment Formula

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

Where:

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

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

Worked Example

Let's say you have a $20,000 car loan with a 5% annual interest rate and a 60-month term. You're considering refinancing to a 4% interest rate with a 72-month term.

Current Loan

Balance: $20,000
Interest Rate: 5%
Term: 60 months
Monthly Payment: $389.81
Total Interest: $1,777.69

Refinanced Loan

Balance: $20,000
Interest Rate: 4%
Term: 72 months
Monthly Payment: $293.24
Total Interest: $1,112.64

Comparison

New monthly payment: $293.24 (down from $389.81)
Total interest saved: $665.05
Total savings: $1,777.69 (interest) + $20,000 (principal) = $21,777.69

In this example, refinancing saves you $665.05 in interest and reduces your monthly payment by $96.57.

When to Refinance Your Auto Loan

Refinancing your auto loan can be beneficial in several situations:

When interest rates have dropped significantly since you originally took out the loan
When you have good credit and can qualify for a lower interest rate
When you want to extend the loan term to lower monthly payments
When you need to pay off the loan early and want to avoid prepayment penalties

Considerations Before Refinancing

Before refinancing, consider these factors:

Closing costs (fees for refinancing)
Prepayment penalties (if any)
Your credit score (higher scores may qualify you for better rates)
Your financial situation (can you afford lower payments?)

Frequently Asked Questions

How much can I save by refinancing my auto loan?

The savings depend on your current interest rate, the new rate you qualify for, and the loan terms. Use this calculator to estimate your potential savings based on different scenarios.

Is it worth it to refinance my auto loan?

Refinancing may be worth it if you can secure a significantly lower interest rate or extend the loan term to lower monthly payments. Consider your financial situation and the costs involved before deciding.

How long does it take to refinance an auto loan?

The refinancing process typically takes 30 to 60 days, depending on your lender, credit approval, and document processing times.