Car Refinance Calculator – See How Much You Can Save
A car refinance calculator helps you quickly determine whether refinancing your existing auto loan will save you money each month and over the life of the loan. By comparing your current loan's interest rate and remaining term with a potential new loan offer, you can see the exact dollar savings before committing. Use this free tool to make a confident, data-driven decision about auto loan refinancing.
The remaining amount you owe on your current auto loan.
Your existing annual interest rate (APR).
How many monthly payments are left on your current loan.
The annual interest rate offered by your new lender.
The number of months for your new refinanced loan.
Any fees charged to refinance or prepayment penalties from your current lender.
Your results will appear here
How to Use This Calculator
1. Enter your current loan balance — this is the amount you still owe on your car, not the original loan amount. 2. Input your current interest rate (APR) as shown on your loan statement. 3. Enter the number of months remaining on your current loan. 4. Type in the new APR offered by your prospective lender. 5. Select the new loan term you are considering from the dropdown. 6. Optionally, add any refinancing fees or prepayment penalties charged by your current lender. 7. Click Calculate to instantly see your new monthly payment, monthly savings, total cost comparison, total interest saved, and the break-even period for any fees paid.
How Car Loan Refinancing Works
Refinancing an auto loan means replacing your existing loan with a new one — typically from a different lender — that offers better terms such as a lower interest rate, a different loan length, or both. The goal is usually to reduce your monthly payment, reduce the total interest paid, or both.
The Monthly Payment Formula
The standard amortizing monthly payment is calculated using the following formula:
- M = P × r(1+r)n / [(1+r)n − 1]
- P = Principal (loan balance)
- r = Monthly interest rate (annual APR ÷ 12 ÷ 100)
- n = Number of monthly payments (loan term in months)
This formula ensures equal payments each month while correctly allocating interest versus principal across the life of the loan.
Total Loan Cost
The total cost of a loan is simply the monthly payment multiplied by the number of payments. For the refinanced loan, any fees are added on top of this figure to give you the true out-of-pocket cost.
Total Interest Saved
Total interest saved is the difference between the total cost of continuing your existing loan and the total cost of the refinanced loan (including fees). A positive number means refinancing saves you money overall.
Break-Even Period
If you pay fees to refinance, you need to keep the new loan long enough to recoup those costs through monthly savings. The break-even period is calculated as:
- Break-Even (months) = Total Fees ÷ Monthly Savings
If you plan to sell or pay off the car before reaching the break-even point, refinancing may not be worth it despite a lower rate.
When Does Refinancing Make Sense?
- Your credit score has improved significantly since you took out the original loan.
- Interest rates in the market have dropped since you financed the car.
- Your original loan had a high dealer-marked-up rate.
- You want to lower your monthly payment to improve cash flow (note: extending the term may increase total interest paid).