Car Refinance Calculator

Should you refinance your current car loan? Use this free calculator to compare the interest cost of paying off your current loan against the payments on a newer low APR loan.

Input Your Remaining Loan Principal, Term & Interest Rate

The principal balance of your auto loan:
(call your lender and ask for the current payoff amount)
Your monthly car payment (Principal & Interest):
Your current interest rate:
Your refinance interest rate:
Enter the number of months you will be refinancing for:

Your Car Refinancing Loan Summary

How much your monthly payment will be if you refinance:
Monthly Payment Reduction:
# of months for interest savings to offset closing costs:
Total interest cost under your current loan:
Total interest cost under your refinanced loan:
How much interest you will save by refinancing:

Refinancing Your Auto or Truck Loans

Buying a new car, truck or SUV typically involves some degree of financing, and that means taking out a loan. Whether that loan is underwritten by a bank, credit union, or the dealership themselves, it will be subject to two critical factors – the buyer's credit history and current available interest rates. Both of these factors are constantly in flux, and it is not often that a buyer experiences a perfect storm where their credit score comes together with a surprisingly low interest rate to create an ideal auto loan. But auto loans are not necessarily written in stone, and refinancing offers buyers the opportunity to improve on the terms of their original financing and possibly save them a significant amount of money.

Refinancing

When a buyer refinances their car, the title and fiscal ownership of that car is transferred to a new creditor and a fresh loan agreement is written. There are two basic reasons to refinance a car. First, if the buyer's credit score has significantly improved they may be eligible for a lower interest rate and better terms. Second, if interest rates were high when the original purchase was made, but have since come down, refinancing offers an opportunity to save a significant amount of money over the life of the loan.

The Advantages of Refinancing

Refinancing an auto loan has a number of distinct advantages. Refinancing can be used to reduce a buyer's monthly payments, making the loan more manageable on a month to month basis. For example, if a buyer refinances their auto loan at a lower interest rate, and at the same time extends the life of the loan, they may be able to significantly reduce their monthly payments. It should be noted, however, that while this type of refinancing may be a short term solution to money woes it is unlikely that the buyer will actually save any money in the long run. The extended life of the loan will likely outweigh any savings brought about by the lower interest rate. But if a buyer refinances at a lower interest rate, and keeps the original repayment terms of their auto loan, it is possible to realize a significant savings on accumulated interest when the loan is finally discharged.

The Disadvantages of Refinancing

Before refinancing a vehicle there are a couple of points to consider. Because the interest on auto loans is front loaded, it is always better to refinance early in the life of the original car loan. The longer a buyer waits, the lower the actual savings. It is also important to note that creditors will rarely refinance an aging vehicle, as the collateral (the car itself) may not have enough resale value to justify the loan. When refinancing a car, buyers should also consider any prepayment penalties that may be tied to the original loan. Some lenders will make the buyer pay a portion of the remaining interest, over and above the principle, when they refinance. This can often offset any potential savings offered by refinancing an auto loan.

The free Car Refinance Calculator will help you decide whether or not you should refinance your current auto loan. Simply input the amount of your principle, your monthly car payment, and the interest rates of your current loan and the refinance loan. The calculator will then reveal the potential savings to be had by refinancing your current car loan.