Auto Refinance Calculator
See how much you could save by refinancing your car loan to a lower interest rate.
Current Loan Details
New Loan Offer
Your Potential Savings
New Monthly Payment
$0
Monthly Savings
$0
Total Interest Saved
$0
This is an estimate for informational purposes and does not constitute financial advice.
About the Auto Refinance Calculator
This calculator is designed to help you determine the potential savings from refinancing your car loan. By comparing your current loan terms to a new offer, you can see how a lower interest rate or a different loan term could affect your monthly payment and the total interest you'll pay over the life of the loan. It's a powerful tool for making an informed decision about whether refinancing is right for you.
Formula Explained
The calculator uses the standard loan payment formula to analyze both your current and new loan scenarios:
- M is your total monthly payment.
- P is the principal loan amount.
- i is your monthly interest rate.
- n is the number of months in your loan term.
It calculates the total interest for both loans and shows you the difference as your "Total Interest Saved".
How to Get a Better Refinance Rate
Securing a lower interest rate is the key to a successful refinance. Here are the most effective strategies:
Improve Your Credit Score
This is the single most important factor. Make all payments on time and reduce your credit card balances to boost your score.
Shop Multiple Lenders
Don't just accept the first offer. Get quotes from credit unions, online banks, and traditional banks to find the most competitive rate.
Choose a Shorter Loan Term
Lenders often offer lower interest rates for shorter loan terms (e.g., 36 or 48 months) because they represent less risk.
Consider a Co-signer
If your credit is less than perfect, applying with a co-signer who has a strong credit history can help you qualify for a much lower rate.
Frequently Asked Questions
When should you refinance a car loan? →
The best time to refinance a car loan is when you can secure a significantly lower interest rate than your current one. This is often possible if your credit score has improved since you first got the loan, or if overall market interest rates have dropped. A good rule of thumb is to consider refinancing if you can lower your rate by at least 1-2%.
Does refinancing a car hurt your credit? →
Refinancing can have a small, temporary impact on your credit score. When you apply, lenders will make a 'hard inquiry' on your credit report, which can temporarily lower your score by a few points. However, if you make your new loan payments on time, your score will likely recover and may even improve in the long run due to a better debt mix.
What is the 60-day rule for car loans? →
The '60-day rule' is a guideline suggesting that you should wait at least 60 days after purchasing a car to refinance it. This allows time for the title and registration process to be completed with the DMV and your original lender, which is necessary before a new lender can take over the loan.
Can you refinance a car loan with the same lender? →
While it's possible, most lenders prefer not to refinance their own loans because they would lose money on the interest. It's almost always better to shop around with different lenders, such as credit unions and online banks, who will compete for your business and offer more competitive rates.
What do I need to apply for auto refinancing? →
To apply for auto refinancing, you will typically need personal information (like your Social Security number and address), proof of income (like pay stubs), and details about your vehicle (like the VIN, make, model, and mileage). You will also need information about your current loan, including the lender's name and your current loan balance.