Auto Refinance Calculator
Compare your current auto loan to a refinance offer. See new monthly payment, monthly savings, and total interest saved over the life of the loan.
Last updated: September 2026
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About this calculator
Auto refinancing replaces your current car loan with a new one at (hopefully) a lower rate. The math: compute the payment for both loans using the standard amortization formula PMT = B × r(1+r)^n / ((1+r)^n − 1), where B is balance, r is monthly rate, n is months. Compare the total-interest cost over each remaining term.
Key caveats. (1) A longer new term at a lower rate can INCREASE total interest even while dropping the monthly payment — you're financing more months. Compare total interest, not just monthly savings. (2) Some current loans have prepayment penalties (rare in auto but possible in some states); check the note. (3) Origination and DMV title-transfer fees typically add $200–500 to the new loan; factor these in.
When refinancing makes sense: rate has dropped since origination (fed cuts, market shifts); your credit has improved 100+ FICO points; you got trapped in a dealer-financing "spot delivery" high-rate loan and now shopping around; you want to remove a co-signer.
When it doesn't: you're near the end of the term (little interest left to save); the car is underwater (owe more than it's worth — refinance lenders won't touch it); your credit dropped.
How to use
Example — $18 000 balance, 8.5% × 48 months current, refinance to 6% × 48 months. Current payment ≈ $443/mo. New payment ≈ $423/mo. Monthly savings $20. Over 48 months, total interest current ≈ $3 273, new ≈ $2 313, savings ≈ $960. Example — same but new term 60 months at 6%. New payment ≈ $348/mo. Monthly cash-flow relief $95 but total interest ≈ $2 892 — you saved on rate but paid more total because the term is longer. Always run total interest before choosing a longer term.
Frequently asked questions
When can I refinance a car loan?
Most lenders require 6–12 months of payment history on the current loan, that the car has clean title (not salvage/rebuilt), and that you're not underwater (LTV < 100–120% depending on lender). No mandatory waiting period beyond that, but too-frequent refinancing hurts credit.
Does auto refinance hurt my credit?
A little, temporarily. The hard inquiry drops your score 5–10 points for 6–12 months; the new account slightly reduces your credit-age average. Both recover within a year. If the refinance saves you thousands, the short-term score hit is worth it.
Can I refinance an underwater loan?
Very hard. Refinance lenders usually cap loan-to-value at 100–120%. Underwater means you owe more than the car is worth (LTV > 100%), and no lender wants to be exposed to that at a lower rate. Options: pay down principal first, wait for depreciation to slow, or trade in and re-buy.
Are there any hidden costs to auto refinancing?
Some. New title transfer fees ($15–50 depending on state), possible lender origination fee ($100–300), and if the new lender is state-specific, a possible tag/registration re-issue. Total closing costs are usually $200–500. Factor them into the break-even math.