Refinance Auto Loan Rates Calculator
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Reviewed by Calculator Editorial Team
Refinancing your auto loan can help you save money on interest payments, but it's important to understand the rates and terms available to you. This calculator helps you compare current and potential refinance rates to make an informed decision.
How to Use This Calculator
To use the refinance auto loan rates calculator:
- Enter your current loan balance
- Select your current interest rate
- Enter the loan term you want to refinance to
- Select the new interest rate you're considering
- Click "Calculate" to see your potential savings
The calculator will show you your current monthly payment, your potential new monthly payment, and the total interest savings over the life of the loan.
How Refinancing Works
Refinancing your auto loan involves replacing your existing loan with a new one, typically with better terms. There are two main types of auto refinancing:
- Debt consolidation: Combining multiple loans into one with a lower interest rate
- Term refinancing: Extending or shortening the loan term while keeping the same balance
When you refinance, you'll typically pay a closing cost (fees) to the lender. These fees can offset some of your savings, so it's important to factor them into your decision.
Key Factors to Consider
When deciding whether to refinance your auto loan, consider these factors:
- Current interest rate: Compare your current rate with available refinance rates
- Loan term: Shorter terms typically have lower monthly payments but higher total interest
- Credit score: A higher score may qualify you for better rates
- Closing costs: These fees can range from 2% to 5% of the loan amount
- Vehicle equity: You must have enough equity to cover the closing costs
Important Note
Refinancing may not always be the best option. If your current rate is already low and you don't have enough equity to cover closing costs, you might be better off keeping your current loan.
Worked Example
Let's look at an example to see how refinancing can save you money.
| Scenario | Loan Balance | Interest Rate | Term | Monthly Payment | Total Interest |
|---|---|---|---|---|---|
| Current Loan | $20,000 | 6.5% | 48 months | $452.50 | $1,152.00 |
| Refinance Option | $20,000 | 4.5% | 60 months | $362.50 | $525.00 |
In this example, refinancing to a lower rate and longer term saves you $627 in total interest over the life of the loan, even after accounting for $400 in closing costs.
Frequently Asked Questions
How much can I save by refinancing my auto loan?
Savings vary depending on your current rate, the new rate you qualify for, and the loan term. Use our calculator to estimate your potential savings.
What are the closing costs for refinancing an auto loan?
Closing costs typically range from 2% to 5% of the loan amount. Common fees include application fees, appraisal fees, and credit report fees.
How long does it take to refinance an auto loan?
The process usually takes 30 to 60 days, though some lenders can process it in as little as 7 days. Factors that affect processing time include your credit score and the lender's requirements.
Can I refinance a car loan with bad credit?
Yes, but you may need to look for lenders that specialize in bad credit auto refinancing. These lenders typically have higher interest rates and may require additional fees.