Refi Auto Loan Calculator
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Reviewed by Calculator Editorial Team
Use this refi auto loan calculator to estimate your potential savings when refinancing your car loan. Compare different interest rates and 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 new loan terms you're considering. The calculator will show you:
- Estimated monthly payment for the new loan
- Total interest paid over the life of the loan
- Potential savings compared to your current loan
Use the results to decide whether refinancing makes financial sense for your situation.
How Refinancing Works
Refinancing your auto loan involves replacing your existing loan with a new one, typically with better terms. This can help you:
- Lower your monthly payments
- Reduce the total interest paid
- Shorten the loan term
Common reasons to refinance include:
- Getting a lower interest rate
- Changing your loan term
- Paying off part of your loan to reduce the principal
Monthly Payment Formula
The monthly payment (P) is calculated using the formula:
P = [Principal × (Interest Rate/12) × (1 + Interest Rate/12)^Term] / [(1 + Interest Rate/12)^Term - 1]
Worked Example
Let's say you have a $20,000 car loan with a 5-year term at 6% APR. You're considering refinancing to a 4-year term at 4.5% APR.
| Loan Detail | Current Loan | New Loan |
|---|---|---|
| Principal | $20,000 | $20,000 |
| Term | 5 years (60 months) | 4 years (48 months) |
| APR | 6% | 4.5% |
| Monthly Payment | $389.84 | $433.87 |
| Total Interest | $2,396.40 | $1,726.88 |
| Total Cost | $22,396.40 | $21,726.88 |
In this example, refinancing would save you $670 in interest over the life of the loan, even though your monthly payment would increase by $44.13.
Frequently Asked Questions
How much can I save by refinancing my auto loan?
The amount you can save depends on your current loan terms, the new interest rate, and the new loan term. Use this calculator to estimate your potential savings.
Is refinancing always a good idea?
Refinancing can be beneficial if you can secure a lower interest rate or a shorter term. However, you should also consider closing costs and whether you'll save enough to justify the process.
How long does it take to refinance an auto loan?
The process typically takes 30 to 60 days, depending on your lender and whether you need a vehicle appraisal.