Car Refinance Calculator

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car refinance calculator
Monthly & Total Savings
Results:
Enter values above and click Calculate.
function calculateRefi(){var balance=parseFloat(document.getElementById('loanBalance').value);var currPay=parseFloat(document.getElementById('currentPayment').value);var rate=parseFloat(document.getElementById('newRate').value)/100/12;var term=parseFloat(document.getElementById('newTerm').value);if(isNaN(balance)||isNaN(currPay)||isNaN(rate)||isNaN(term)){alert('Please enter valid numeric values.');return;}var newPay=balance*(rate*Math.pow(1+rate,term))/(Math.pow(1+rate,term)-1);var monthlySaving=currPay-newPay;var totalNewCost=newPay*term;var ans=document.getElementById('answer');var resultHTML='
New Monthly Payment: $'+newPay.toFixed(2)+'
';if(monthlySaving>0){resultHTML+='
Monthly Savings: $'+monthlySaving.toFixed(2)+'
';}else{resultHTML+='
Monthly Increase: $'+Math.abs(monthlySaving).toFixed(2)+'
';}if(document.getElementById('steps').checked){resultHTML+='
';resultHTML+='Total Cost of New Loan: $'+totalNewCost.toFixed(2)+'
';resultHTML+='Total Interest (New Loan): $'+(totalNewCost-balance).toFixed(2)+'
';resultHTML+='Refinance Impact: Based on a $'+balance.toFixed(2)+' balance at '+(rate*12*100).toFixed(2)+'% APR.';resultHTML+='
';}ans.innerHTML=resultHTML;}

How to Use the Car Refinance Calculator

Deciding whether to refinance your auto loan requires precise math to ensure the move actually saves you money. Our car refinance calculator is designed to help you compare your current monthly commitment against a potential new loan structure. By adjusting interest rates and loan terms, you can visualize exactly how much cash stays in your pocket each month.

To get the most accurate results, you will need your most recent loan statement to identify your remaining balance and current monthly payment.

Remaining Loan Balance
The total amount of principal you still owe to your current lender. Do not include future interest.
Current Monthly Payment
What you currently pay each month. This serves as the baseline for calculating your monthly savings.
New Interest Rate (APR)
The Annual Percentage Rate offered by a new lender. Even a 1-2% drop can result in significant savings.
New Loan Term
The duration of the new loan in months. Caution: Extending the term may lower payments but increase total interest paid over time.

How It Works: The Refinance Formula

The car refinance calculator uses the standard amortization formula to determine your new monthly payment. The goal is to solve for "P" (Payment) based on the current principal balance, the new monthly interest rate, and the number of months remaining.

PMT = [PV * i * (1 + i)^n] / [(1 + i)^n – 1]

  • PMT: The new monthly payment amount
  • PV: Present Value (the remaining loan balance)
  • i: Monthly interest rate (Annual Rate divided by 12)
  • n: Total number of monthly payments (the new term)

Calculation Example

Scenario: Sarah has an existing car loan with a remaining balance of $20,000. She currently pays $550 per month. She finds a lender offering a 5% APR for a 48-month term.

Step-by-step solution:

  1. Identify Balance: $20,000
  2. New Monthly Rate: 0.05 / 12 = 0.004167
  3. New Term: 48 months
  4. Calculate Payment: [20000 * 0.004167 * (1.004167)^48] / [(1.004167)^48 – 1] = $460.59
  5. Monthly Savings: $550 – $460.59 = $89.41

Common Questions

When is the best time to use a car refinance calculator?

You should consider refinancing if your credit score has improved significantly since you first took out the loan, if market interest rates have dropped, or if you are struggling with your current monthly payment and need to extend the term to make it more manageable.

Does refinancing hurt my credit score?

When you apply for a refinance, the lender will perform a "hard inquiry," which may cause a temporary dip in your credit score (usually less than 5 points). However, paying off the old loan and consistently paying the new one can help your score in the long run.

Are there fees involved in car refinancing?

While many auto lenders do not charge "origination fees" like mortgage lenders do, you may still have to pay a small title transfer fee or re-registration fee depending on your state. Always check for prepayment penalties on your current loan before proceeding.

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