Car Loan Refinance Calculator
Calculate loan payments, interest costs, and repayment schedules.
Current Loan Details
How long you've had this loan
Current Loan Summary
Vehicle Details
Current market value
Equity Position
Refinance Analysis
Recommendation
Break-even in 25.3 months
Monthly Savings
Lower monthly payment
Total Savings
Over loan life
New Loan: Principal vs Interest
Current Loan
New Loan
Savings Analysis
Refinancing Benefits
- • Lower monthly payment by $19.76
- • Save $1,448 in interest
- • Reduce interest rate by 3.00%
- • Maintain $3,500 in equity
⚠️ Risk Factors
- • Long break-even period
📋 Refinance Checklist
- • Check for prepayment penalties on current loan
- • Gather required documents (pay stubs, vehicle title)
- • Shop rates from multiple lenders within 14-45 days
- • Consider total cost, not just monthly payment
- • Ensure vehicle meets age/mileage requirements
- • Factor in all fees and closing costs
- • Verify loan-to-value ratio is acceptable
❌ Don't Refinance If
- • Your vehicle is worth less than the loan balance by 25%+
- • You\'re planning to pay off the loan within 12 months
- • Your current loan has less than 2 years remaining
- • Refinance fees exceed 6 months of payment savings
- • Your credit score has significantly worsened
- • The vehicle is older than 10 years
How it works
Refinancing a car loan replaces it with a new one at a lower rate, reducing the payment or total interest. The win comes from a better rate (often after your credit improves), as long as the new loan's term doesn't stretch the balance back out.
New payment & savings
M = P · r(1 + r)ⁿ / [(1 + r)ⁿ − 1] Savings = old total interest − new total interest
- P
- current loan balance
- r
- new monthly rate
- n
- new number of payments
Worked example
- Balance $20,000, 3 years left
- Rate drops from 9% to 5%
- Old payment ≈ $636; new payment ≈ $599
- Compare total interest over the remaining term
Saves ~$37/month and over $1,300 in interest if the term stays the same.
Good to know
- Keep the remaining term the same or shorter — extending it can erase the savings even at a lower rate.
- Make sure the car isn't worth less than the loan (underwater); lenders are wary of high loan-to-value refinances.
- Check for any prepayment penalty on the current loan and fees on the new one.
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Frequently Asked Questions
When does refinancing a car loan make sense?
When you can get a meaningfully lower rate — typically because your credit improved, market rates fell, or your original dealer loan was overpriced. The earlier in the loan you refinance, the more interest there is left to save.
How much can refinancing save?
On a $20,000 balance with 3 years left, dropping from 9% to 5% cuts the payment from about $636 to $599 and saves over $1,300 in interest with the same term. Run your actual balance, rates, and remaining term to see your numbers.
Should I extend the loan term when I refinance?
Be careful: stretching the remaining balance over more years lowers the payment but can erase the interest savings entirely — even at a lower rate. Keeping the term the same or shorter guarantees the rate drop translates into real savings.
Can I refinance if I owe more than the car is worth?
It is harder — lenders cap loan-to-value ratios, and an underwater loan may exceed them. Some lenders allow up to 125% LTV with strong credit, but you may need to pay the difference down first to qualify.
Does refinancing a car loan hurt my credit?
Only slightly and temporarily: the hard inquiry and the new account can dip your score a few points, while rate-shopping inquiries within a short window typically count as one. On-time payments on the new loan rebuild the score quickly.