function calculateRefinance() {
var balance = parseFloat(document.getElementById('currentBalance').value);
var currentPayment = parseFloat(document.getElementById('currentPayment').value);
var remainingMonths = parseInt(document.getElementById('remainingMonths').value);
var newRate = parseFloat(document.getElementById('newRate').value);
var newTerm = parseInt(document.getElementById('newTerm').value);
var fees = parseFloat(document.getElementById('refinanceFees').value);
if (isNaN(balance) || isNaN(currentPayment) || isNaN(remainingMonths) || isNaN(newRate) || isNaN(newTerm)) {
alert("Please fill in all fields with valid numbers.");
return;
}
var monthlyRate = (newRate / 100) / 12;
var principal = balance + fees;
var newMonthlyPayment;
if (monthlyRate === 0) {
newMonthlyPayment = principal / newTerm;
} else {
newMonthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, newTerm)) / (Math.pow(1 + monthlyRate, newTerm) – 1);
}
var totalCostCurrent = currentPayment * remainingMonths;
var totalCostNew = (newMonthlyPayment * newTerm);
var totalSavings = totalCostCurrent – totalCostNew – fees;
var monthlySavings = currentPayment – newMonthlyPayment;
document.getElementById('newMonthlyPaymentResult').innerText = "$" + newMonthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('monthlySavingsResult').innerText = "$" + monthlySavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalSavingsResult').innerText = "$" + totalSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var resultArea = document.getElementById('results-area');
var savingsMsg = document.getElementById('savingsMessage');
var totalSavingsEl = document.getElementById('totalSavingsResult');
resultArea.style.display = 'block';
if (totalSavings > 0) {
totalSavingsEl.style.color = '#28a745';
savingsMsg.innerText = "Refinancing will save you money over the life of the loan.";
} else {
totalSavingsEl.style.color = '#dc3545';
savingsMsg.innerText = "Warning: This refinance structure may cost you more than staying with your current loan.";
}
}
How to Use the Personal Loan Refinance Savings Calculator
Refinancing a personal loan involves taking out a new loan to pay off your existing balance, ideally with a lower interest rate or a more favorable term. Use this calculator to determine if moving your debt to a new lender makes financial sense.
Why Refinance Your Personal Loan?
Lower Interest Rates: If market rates have dropped or your credit score has improved since you first took the loan, you could save thousands in interest.
Reduced Monthly Payments: By extending the term or lowering the rate, you can free up monthly cash flow.
Debt Consolidation: Simplify your finances by combining multiple high-interest debts into one lower-interest loan.
The Calculation Explained
The calculator compares the Total Cost of Debt. It calculates how much you would pay if you continued your current payment schedule versus the total cost of the new loan (including any origination fees or closing costs).
Formula: Total Savings = (Remaining Payments × Current Monthly Payment) – (New Monthly Payment × New Term Length) – Refinance Fees.
A Realistic Example
Suppose you have $15,000 remaining on a loan at a 12% interest rate, paying $450 per month with 48 months left. If you refinance into a new 36-month loan at 7.5% interest with a $200 fee:
New Monthly Payment: $466.59
New Total Cost: $16,797.24 (plus $200 fee)
Old Total Cost: $21,600.00
Total Savings: $4,602.76
In this scenario, even though the monthly payment increased slightly because of the shorter term, the total savings over the life of the loan are significant because you pay off the debt faster at a much lower rate.
Key Factors to Consider
Before signing a new loan agreement, check for prepayment penalties on your current loan. Some lenders charge a fee for paying off the balance early, which could eat into your calculated savings. Additionally, look out for "origination fees" on the new loan, which typically range from 1% to 8% of the loan amount.