Compare your current auto loan with a potential refinance offer to see how much you could save.
Total Savings: $0.00
Monthly Savings: $0.00
Current Monthly Payment:—
New Monthly Payment:—
Total Interest (Current Loan):—
Total Interest (New Loan):—
Break-even Point:—
How Does Car Loan Refinancing Work?
Refinancing a car loan involves taking out a new loan to pay off your existing vehicle debt. Ideally, the new loan has better terms—usually a lower interest rate—which reduces your monthly expenditure or the total amount of interest you pay over the life of the loan.
When Should You Refinance Your Auto Loan?
Interest Rates Have Dropped: If market rates have decreased since you first bought your car, you could save significantly.
Your Credit Score Improved: If you've been diligent with payments and your credit score has jumped, you likely qualify for a lower tier of interest.
Lower Monthly Payment Needed: If your budget is tight, refinancing into a longer term can lower your monthly bill, though it may increase total interest.
Real-World Example
Imagine you have a $20,000 balance at 8% interest with 48 months remaining. Your current payment is roughly $488.
If you refinance that $20,000 into a new 48-month loan at 5% interest, your new payment becomes $461. You would save $27 per month and over $1,300 in total interest over the life of the loan.
Understanding the Break-Even Point
Many lenders charge a flat fee or document fee to process a refinance. The "Break-even Point" is the number of months it takes for your monthly savings to cover the cost of these fees. For example, if it costs $200 to refinance and you save $20 a month, your break-even point is 10 months. If you plan to sell the car before then, refinancing might not be worth it.
function calculateRefi() {
var balance = parseFloat(document.getElementById('currentBalance').value);
var currentRate = parseFloat(document.getElementById('currentRate').value) / 100 / 12;
var currentMonths = parseFloat(document.getElementById('remainingMonths').value);
var newRate = parseFloat(document.getElementById('newRate').value) / 100 / 12;
var newMonths = parseFloat(document.getElementById('newTerm').value);
var fees = parseFloat(document.getElementById('refiFees').value) || 0;
if (isNaN(balance) || isNaN(currentRate) || isNaN(currentMonths) || isNaN(newRate) || isNaN(newMonths)) {
alert("Please enter valid numbers in all fields.");
return;
}
// Current Payment Calculation
var currentPMT = 0;
if (currentRate === 0) {
currentPMT = balance / currentMonths;
} else {
currentPMT = (balance * currentRate * Math.pow(1 + currentRate, currentMonths)) / (Math.pow(1 + currentRate, currentMonths) – 1);
}
// New Payment Calculation
var newPMT = 0;
if (newRate === 0) {
newPMT = balance / newMonths;
} else {
newPMT = (balance * newRate * Math.pow(1 + newRate, newMonths)) / (Math.pow(1 + newRate, newMonths) – 1);
}
var currentTotalInterest = (currentPMT * currentMonths) – balance;
var newTotalInterest = (newPMT * newMonths) – balance;
var monthlySavings = currentPMT – newPMT;
var totalCostCurrent = currentPMT * currentMonths;
var totalCostNew = (newPMT * newMonths) + fees;
var totalSavings = totalCostCurrent – totalCostNew;
var breakEven = "N/A";
if (monthlySavings > 0 && fees > 0) {
breakEven = Math.ceil(fees / monthlySavings) + " months";
} else if (fees === 0) {
breakEven = "Immediate";
}
// Display results
document.getElementById('refi-result').style.display = 'block';
document.getElementById('totalSavingsResult').innerText = "Total Savings: $" + totalSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('monthlySavingsResult').innerText = "Monthly Savings: $" + monthlySavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('currentPayment').innerText = "$" + currentPMT.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('newPayment').innerText = "$" + newPMT.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('currentInterest').innerText = "$" + currentTotalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('newInterest').innerText = "$" + newTotalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('breakEven').innerText = breakEven;
// Change color if savings are negative
if (totalSavings < 0) {
document.getElementById('totalSavingsResult').style.color = "#d32f2f";
} else {
document.getElementById('totalSavingsResult').style.color = "#2e7d32";
}
}