Refi Auto Calculator

Auto Loan Refinance Calculator

Your Current Auto Loan Details

Proposed Refinance Loan Details

Understanding Auto Loan Refinancing and How This Calculator Helps

Refinancing your auto loan means replacing your existing car loan with a new one, typically from a different lender, but sometimes from the same one. The primary goal of refinancing is often to secure more favorable terms, which can lead to significant savings over the life of the loan or a more manageable monthly payment.

Why Consider Refinancing Your Auto Loan?

There are several compelling reasons why car owners choose to refinance:

• Lower Interest Rate: If your credit score has improved since you first took out your loan, or if market interest rates have dropped, you might qualify for a lower annual interest rate. A lower rate directly translates to less money paid in interest over time.
• Reduced Monthly Payments: By securing a lower interest rate or extending your loan term (or both), you can decrease your monthly payment, freeing up cash flow in your budget. Be mindful that extending the term might mean paying more interest overall, even with a lower rate.
• Shorter Loan Term: If your financial situation has improved, you might want to shorten your loan term. This means you'll pay off your car faster and typically pay less interest overall, though your monthly payments will likely increase.
• Remove a Co-signer: If you initially needed a co-signer to get approved, refinancing can allow you to remove them from the loan once your credit standing is strong enough.

How Our Auto Loan Refinance Calculator Works

This calculator is designed to help you quickly compare your current auto loan terms with potential new refinance terms. By inputting a few key pieces of information, you can see the potential impact on your monthly payments and total interest paid.

1. Current Loan Balance: This is the outstanding amount you still owe on your existing car loan.
2. Current Annual Interest Rate (%): The interest rate you are currently paying on your auto loan.
3. Current Remaining Term (Months): The number of months you have left to pay on your current loan.
4. New Annual Interest Rate (%): The proposed interest rate you expect to get with a refinanced loan. This is often the most significant factor in savings.
5. New Loan Term (Months): The proposed number of months for your new refinanced loan. You might choose a shorter term to save on interest or a longer term to reduce monthly payments.

The calculator then performs the following calculations:

• It determines your Current Estimated Monthly Payment based on your existing loan details.
• It calculates your New Estimated Monthly Payment using the proposed refinance terms and your current outstanding balance.
• It shows your immediate Monthly Payment Savings, highlighting how much extra cash you'd have each month.
• It estimates the Total Interest Paid over the remaining term of your current loan and compares it to the Total Interest Paid over the full term of your new refinanced loan, giving you a clear picture of Total Interest Savings.

Example Scenario:

Let's say you have a current auto loan with:

• Current Loan Balance: $15,000
• Current Annual Interest Rate: 7.5%
• Current Remaining Term: 36 months

Your current estimated monthly payment would be approximately $467.32, and you'd pay about $1,823.52 in interest over the remaining term.

Now, imagine you find a refinance offer with:

• New Annual Interest Rate: 4.5%
• New Loan Term: 48 months

With these new terms, your new estimated monthly payment would be approximately $341.87. Over the new 48-month term, you'd pay about $1,409.76 in interest.

This means you'd save approximately $125.45 on your monthly payment and about $413.76 in total interest, even with a longer loan term!

Important Considerations Before Refinancing:

• Refinance Fees: Some lenders charge fees for refinancing. Factor these into your decision.
• Credit Score Impact: Applying for new credit can temporarily ding your credit score.
• Loan-to-Value Ratio: If your car is worth significantly less than what you owe (you're "upside down"), it might be harder to refinance.
• Prepayment Penalties: Check your current loan agreement for any penalties for paying off the loan early.

Use this calculator as a powerful tool to explore your options and make an informed decision about refinancing your auto loan.