Auto Loan Refinance Calculator

How it works

The current payment is the level payment that repays your balance at the current APR over the months left; the interest still to come is that payment times the months left, less the balance.

The new loan repays the same balance, plus the fees if they are added to it, at the new APR over the new term. Its total interest is the new payment times the new term, less the amount borrowed.

Net savings is the current loan's remaining interest less the new loan's interest and the fees. That is the same as the difference in everything you would pay from today: remaining payments on the current loan against payments and fees on the new one. A negative figure means refinancing costs more in total.

A longer new term can lower the payment while raising total interest, so the payment change and the net savings can point in opposite directions.

Formula

rc = current APR ÷ 1200     rn = new APR ÷ 1200
current payment Mc = B × rc ÷ (1 − (1 + rc)^−Nc)        (= B ÷ Nc when rc = 0)
remaining interest, current = Mc × Nc − B
new principal = B + fees (fees financed) or B (fees in cash)
new payment Mn = new principal × rn ÷ (1 − (1 + rn)^−Nn)
total interest, new = Mn × Nn − new principal
net savings = remaining interest, current − total interest, new − fees
change in payment = Mn − Mc

Example

An $18,000 balance at 9% with 48 months left costs $447.93 a month, with $3,500.68 of interest still to come.

Refinancing at 6% for 48 months with $300 of fees added to the loan gives a new payment of $429.78, $18.15 a month less. The new loan's interest is $2,329.25, so the net savings after fees are $871.43.

Stretching the new loan to 72 months instead lowers the payment to $303.28, $144.65 less, but its interest of $3,536.44 plus the fees exceeds the current loan's, so the net savings are −$335.76.

Assumptions and limitations

• Both loans are fixed-rate with level monthly payments. The current payment is assumed to be the level payment for the balance and months entered; a statement showing a different payment will give slightly different results.
• Totals are dollars paid and do not account for when they are paid; a longer new term moves payments later.
• The current loan has no prepayment penalty, and the new APR is the rate you would actually be offered. Fees are what you enter; the default is illustrative.
• Results are informational and educational, not financial advice.

Frequently asked questions