Auto Loan Refinance Calculator
New payment and total saving from refinancing a car loan at a lower rate, the cost of a longer term, loan-to-value against the car’s value, fee break-even and the payoff if you keep your current payment.
| Current payment / remaining interest | — |
|---|---|
| New payment / total interest + fees | — |
| Monthly change | — |
| Lifetime change | — |
| Loan-to-value | — |
| Keep the current payment at the new rate | — |
| Fee break-even | — |
In short
Refinancing a car loan pays when your credit score has improved or rates have fallen and the lender’s loan-to-value cap (usually 100–125% of the car’s value) is met: $22,000 at 9.9% with 48 months left refinanced at 6.4% with $150 of fees cuts the payment from $557 to $524 and saves $1,567 overall, with the fee recovered in five months.
Who this is for: Car owners whose credit has improved since the dealership loan, and anyone offered a lower rate by a bank or credit union.
When refinancing a car loan pays off
Car loans are refinanced for one of two reasons: your credit score has improved since you bought (dealer-arranged loans are often 2–4 points above what a credit union would offer), or rates have fallen. The maths is the same as any refinance — the new payment at the new rate over the new term, against what you would pay by continuing — but two things are specific to cars: the loan-to-value cap (most lenders stop at 100–125% of the vehicle's current value) and the fact that a car is a depreciating asset, so extending the term risks owing more than it is worth for longer.
The cleanest win is to refinance at the lower rate and keep paying your current amount: the calculator shows how many months that knocks off and how much interest it saves, usually more than the lender's "lower payment" headline.
See also: Car Payment Calculator — Auto Loan with Trade-In & Tax, Car Lease vs Buy Calculator, Loan APR Calculator — True Cost with Fees, Debt Consolidation Calculator — Any Currency.
Assumptions
- Current loan amortised over the months remaining; new loan = balance + fees at the new APR over the new term.
- Loan-to-value = new loan ÷ car value; flagged above 100% and above 125%.
- Fixed APRs; no prepayment penalty on the current loan; GAP insurance and extended warranties excluded.
- Fee break-even = fees ÷ monthly payment reduction.
Worked example
Current: $557 a month, $4,732 of remaining interest. New: $22,150 at 6.4% → $524 a month, $3,165 interest + fees. Saves $33 a month and $1,567 overall; the fee is recovered in 5 months. Loan-to-value 92% on a $24,000 car — fine. Keeping the $557 payment clears the loan in 45 months with $2,812 of interest.
Frequently asked questions
How soon after buying can I refinance?
Usually after the title is issued (60–90 days); some lenders want six months of payment history. Earlier is better because interest is front-loaded.
Does a longer term ever make sense?
Only to rescue cash flow; it raises the total cost and extends the time you are underwater. Prefer the same or a shorter term.
What credit score do I need?
Rates step down sharply above about 660 and again above 720; a jump of 40–60 points since purchase is usually enough to make refinancing worthwhile.
Can I refinance if I owe more than the car is worth?
Up to most lenders' 110–125% LTV limit, at a higher rate; beyond that you need to pay the difference in cash.
Will it hurt my credit?
A small temporary dip from the hard inquiry; rate-shopping within 14–45 days counts as one inquiry.
Are there fees?
Typically a title/lien transfer fee ($10–100) and sometimes a lender fee; many credit unions charge nothing.
Can I get cash out when refinancing a car?
Some lenders allow it up to the LTV cap, but borrowing against a depreciating car is expensive and risky.
What if my car is leased?
You cannot refinance a lease; you can buy it out with a lease-buyout loan, which works like a refinance of the residual value.
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