Refinance My Auto Loan Calculator

How to Use This Calculator

Enter your current loan details and potential refinanced loan details into the calculator on the right. The calculator will show you:

• Your current monthly payment
• Your refinanced monthly payment
• The total interest you'll pay over the life of the loan
• The break-even point (how many months you need to drive to make refinancing worthwhile)
• A comparison chart showing your payment and interest over time

Use the results to decide whether refinancing is right for you. Remember that refinancing may not always be the best option, especially if you're close to paying off your current loan.

How Refinancing Works

Refinancing your auto loan involves replacing your current loan with a new one, typically with better terms. This can mean lower interest rates, a shorter loan term, or both.

Types of Auto Loan Refinancing

1. Rate-and-term refinance: You get a new interest rate and loan term, but keep the same loan amount.
2. Cash-out refinance: You get a new loan for more than your current balance, allowing you to use the difference for other purposes.
3. Debt consolidation refinance: You combine multiple loans into one, often with better terms.

Pros and Cons

Worked Example

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

• Loan amount: $20,000
• Current interest rate: 8% APR
• Current loan term: 60 months

You're considering refinancing to these terms:

• Refinanced loan amount: $20,000
• New interest rate: 5% APR
• New loan term: 48 months

Using the calculator, you'll see that:

• Your current monthly payment is $386.67
• Your refinanced monthly payment is $433.33
• You'll pay $1,120.00 more in total interest over the life of the loan
• You'll need to drive for 18 months to break even on the refinancing

In this case, refinancing might not be the best option because you'd pay more in interest and would need to drive for 18 months to make up for the higher monthly payment.