Debt management

Car Refinance Calculator

Enter the balance, new rate and term to see the monthly payment on a refinanced car loan.

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Enter the balance, rate and term to see the new payment.

Worked example

With these example inputs:

Loan balance$25,000
New interest rate6%
New term5 yr

Monthly payment: $483.32

Loan amount$25,000
Total interest$3,999
Total of payments$28,999
Payoff time5 yr

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Refinancing a car loan saves money when the new loan costs less in total than finishing the old one. A lower rate doesn't guarantee that, because a longer term can add more interest than the rate cut removes. Any fees count against the saving as well.

Run the calculator twice

First, price the loan you already have. Enter your payoff balance, your current rate and the years left. The total interest is what you'd still pay by keeping it.

Then enter the same balance with the new offer's rate and term. Compare the two totals, not the two monthly payments. The loan comparison calculator can also put both loans side by side.

Ask your lender for a payoff amount, and take the rate from your contract. The term box takes whole years, so round what's left to the nearest year.

Why a lower rate can cost you more

Say you owe $20,000 at 11% with three years left, and a lender offers 7%. Here's what each term does:

$20,000 balance	Rate	Monthly payment	Total interest	Total paid
Keep the old loan, 3 years left	11%	$654.77	$3,572	$23,572
Refinance over 3 years	7%	$617.54	$2,232	$22,232
Refinance over 4 years	7%	$478.92	$2,988	$22,988
Refinance over 5 years	7%	$396.02	$3,761	$23,761
Refinance over 6 years	7%	$340.98	$4,551	$24,551

Keeping the same three years saves $1,340 in total. Stretch to five years, and the payment drops by $258.75 a month. Yet you'd pay $189 more than if you'd never refinanced.

The Consumer Financial Protection Bureau (CFPB) puts the trade-off plainly. A longer loan can reduce your monthly payment, but you pay more interest over the life of the loan. Four years still saves $584 here. So if you need a lower payment, stretch only as far as your budget needs.

Fees, penalties and the APR

Refinancing means paying off the old loan in full. If your contract has a prepayment penalty, you may owe a fee, the CFPB warns. Check the contract, and whether your state's law bans such penalties.

The new lender may charge fees too. An auto loan's interest rate leaves them out, while the APR includes them. So compare APRs with APRs, never an APR with a rate.

The calculator has no fee field, so add fees to the total yourself. Say the new loan carries $400 in fees, paid upfront. The three-year option then costs $22,632 in all, still $940 less than keeping the old loan.

Be wary of anyone who wants money before doing anything. The Federal Trade Commission (FTC) says scam refinancers promise lower payments but insist you pay them first.

Is your rate high enough to bother?

The Federal Reserve tracks what lenders charge. In the second quarter of 2026, commercial banks averaged 7.14% on 60-month new-car loans. That's down from 7.53% in the first quarter.

If you're paying well above that, a few quotes are worth the effort. The average covers new cars, though. A used car or a thinner credit file may be priced differently.

Late in the loan, there's little left to save

Interest is charged on the balance, so the saving shrinks as you pay the loan down. Here's the same four-point cut at three stages:

Interest still to pay: 11% loan vs a 7% refinance

Same remaining term, at three points in the life of a car loan

$20,000 left, 3 years to go, at 11% $3,572

Same, refinanced at 7% $2,232

$12,000 left, 2 years to go, at 11% $1,423

Same, refinanced at 7% $895

$7,000 left, 1 year to go, at 11% $424

Same, refinanced at 7% $268

The same four-point cut saves $1,340 with three years left, but only $156 with one.

With a year to go, the cut is worth just $156. A $400 fee would turn that into a $244 loss. Early in the loan, the same fee is easily covered.

Shopping for quotes barely touches your credit

Each application usually means a credit check. The CFPB says shopping for an auto loan generally has little to no impact on your scores. Requests made within 14 to 45 days of each other generally count as a single inquiry. So gather your quotes within two weeks.

Owe more than the car is worth?

The CFPB calls that negative equity, or being upside down. The calculator can't see your car's value, so check it against your payoff amount before you apply. The car depreciation calculator shows how fast that value falls. Buying a different car instead? The auto loan calculator prices the new loan.

Sources

Frequently asked questions

When does refinancing a car loan save money?

When the new loan's interest plus fees comes to less than the interest left on your current loan. Compare totals, not monthly payments.

Does a longer term always cost more?

At the same rate, yes. With a lower rate it depends on how far you stretch, so compare the total paid.

What numbers do I need from my current loan?

Your payoff amount, your interest rate and the time left. Round the time to whole years, since the term box takes years.

Is there a penalty for paying off a car loan early?

Some contracts have a prepayment penalty, and refinancing pays the old loan off in full. Check your contract and your state's rules.

Does shopping for a refinance hurt my credit?

Generally very little. Auto loan credit checks made within 14 to 45 days of each other generally count as one inquiry.