Auto Loan Refinance Calculator
See how much you can save by refinancing your auto loan.
Compare your current rate to a new rate and see monthly and total savings.
How Auto Refinancing Calculations Work
Refinancing an auto loan replaces your current loan with a new one at a (hopefully) lower interest rate or different term. The key calculation is whether the interest savings exceed any fees and offset the cost of extending your loan term.
Monthly payment formula:
M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]
Where P = remaining loan balance, r = new monthly rate, n = new term in months.
Worked example:
Current loan:
- Remaining balance: $18,000
- Current rate: 8.9% APR → monthly rate: 0.7417%
- Remaining term: 36 months
- Current payment: $572/month
New refinanced loan:
- Same balance: $18,000
- New rate: 5.9% APR → monthly rate: 0.4917%
- New term: 36 months
New payment = 18,000 × [0.004917 × (1.004917)^36] ÷ [(1.004917)^36 − 1] New payment ≈ $547/month
Monthly savings: $572 − $547 = $25/month
Total savings over 36 months: $25 × 36 = $900
Break-even calculation:
If there are refinancing fees (title transfer, lender fees): typically $150–$300.
Break-even months = Total fees ÷ Monthly savings = $200 ÷ $25 = 8 months
The refinance pays for itself after 8 months.
When NOT to refinance:
- Your current loan has a prepayment penalty that exceeds savings
- Extending the term reduces monthly payments but increases total interest paid significantly
- Your car’s value is less than the loan balance (underwater) — lenders may decline
- You plan to pay off the loan very soon — break-even won’t be reached
Best auto refinance timing: within the first 2 years of the original loan, before most interest has already been paid.