How to use this calculator
The results update as you type.
Your current loan
- Payoff balance: what it would cost to pay off the loan today. Your lender can give you an exact payoff amount.
- Current APR: the rate on your existing loan.
- Payments left: how many monthly payments remain.
New loan
- New APR: the rate you’ve been offered.
- New loan term: how long the new loan would run.
- Fees: the total of any lender, title or registration fees.
- Add the fees to the new loan: tick this if you’ll roll the fees into the loan instead of paying them up front.
The results compare your monthly payment, time left and interest on both loans, and show the overall saving or extra cost, plus the break-even month.
Example: $18,000 at 9.9% with 48 months left
Say you owe $18,000 at 9.9% APR with 48 payments left, and you’re offered 6.4% APR over 48 months with $300 in fees, paid up front.
| Keep current loan | Refinance | |
|---|---|---|
| Monthly payment | $455.66 | $426.04 |
| Interest from today | $3,871.80 | $2,449.89 |
| Fees | $0 | $300.00 |
Refinancing saves $1,121.91 overall and lowers your payment by $29.62 a month. The interest you avoid covers the $300 of fees by month 6.
Now compare a longer term. Refinancing the same balance at 6.4% over 60 months instead drops the payment to $351.35, but the overall saving shrinks to $490.91, because you pay interest for an extra year.
The trap to watch for is a lower payment that costs more. Say your loan is at 6.9% with 24 payments left, and a lender offers 7.5% over 60 months. Your payment would fall from $805.09 to $360.68, but you’d pay $2,618.81 more in total. The calculator shows a warning when that happens.
How it’s calculated
Monthly payment = loan × r ÷ (1 − (1 + r)^−n), where r is the monthly rate (APR ÷ 12 ÷ 100) and n is the number of months.
- Current loan: your payoff balance repaid over the payments left at your current APR.
- New loan amount: your payoff balance, plus the fees if you add them to the loan.
- Overall saving = what’s left to pay on the current loan − (the new loan’s payments + any fees paid up front).
- Break-even: the first month when the interest avoided, month by month, adds up to the fees.
The calculator assumes both loans have fixed rates and you make every payment on time. Figures are calculated at full precision and rounded for display. The last payment on each loan is adjusted so the balance ends at exactly zero.
Tips for refinancing a car loan
- Check your current rate against today’s offers. If your credit has improved, you may qualify for a lower rate than you got at the dealer.
- Keep the term the same or shorter. That way a lower rate turns straight into savings instead of extra months of interest.
- Ask for every fee in writing. Include title and lien transfer fees, and check your current loan for a prepayment penalty.
- Pay the fees up front if you can. Rolled-in fees collect interest for the whole loan.
- Compare several lenders. Banks, credit unions and online lenders can quote very different rates for the same car.
- Watch the break-even month. If you plan to sell the car soon, make sure you’ll keep it long enough for the fees to pay off.
Frequently asked questions
Is it worth refinancing my car loan?
It's usually worth it when the new rate is clearly lower, the fees are small, and you don't stretch the loan much longer. In our example, dropping from 9.9% to 6.4% on $18,000 with 48 months left saves $1,121.91 after $300 of fees.
Does a lower payment mean I'm saving money?
Not always. A longer term lowers the payment but adds months of interest. In our example, refinancing a 6.9% loan with 24 months left into a 60-month loan at 7.5% cuts the payment from $805.09 to $360.68, but costs $2,618.81 more overall.
What fees come with refinancing a car loan?
Some lenders charge an application or origination fee, and your state may charge to transfer the title and update the lien. Your current loan may also have a prepayment penalty. Ask each lender for all fees and enter the total.
Should I add the fees to the new loan?
Paying fees up front costs less, because rolled-in fees collect interest. In our example, adding $300 of fees to the loan raises the payment by $7.10 and reduces the saving from $1,121.91 to $1,081.08.
What is the break-even month?
It's the first month when the interest you've avoided by refinancing adds up to the fees. If you might sell or pay off the car before then, refinancing may not be worth it.
When is a good time to refinance?
Often when your credit score has improved since you took out the loan, or when you're paying a high rate from a dealer. Refinancing early in the loan saves more, because more of each payment is still interest.