The comparison
How to use the car refinance calculator
Start with the amount required to pay off the current loan, its annual rate and the number of scheduled payments remaining. Then enter the new rate, new term and any refinance fee paid upfront. The calculator amortizes both loans from today and compares every remaining payment.
The Consumer Financial Protection Bureau recommends comparing the amount financed, APR or interest rate, loan length and monthly payment—not the payment alone. A longer term can lower the payment while increasing total interest.
P is the payoff amount, r is the annual rate divided by 12, and n is the number of monthly payments. At a 0% rate, the balance is divided evenly by the term.
Worked example
Refinancing $22,000 from 8.5% to 5.9%
With 48 payments left, the estimated current payment is about $542 per month. A new 48-month loan at 5.9% is about $516 per month. After a $300 upfront fee, the estimated remaining total cost falls by about $977, and the payment savings recover the fee after about 12 months.
These values are rounded for readability. The calculator uses the full unrounded payment amounts.
Look beyond the payment
A lower payment is not automatically a cheaper refinance
Extending the term spreads the balance across more payments. That may help monthly cash flow, but it can also increase the total interest and keep the vehicle financed longer. Review both the monthly-payment change and the total-savings result before deciding.
- Compare offers using the same payoff amount and the same fee assumptions.
- Check whether fees are paid upfront or added to the new principal.
- Confirm whether the existing loan has a prepayment charge.
- Consider how long you expect to keep the vehicle and loan.
Official references: CFPB guidance on comparing auto loans and CFPB explanation of APR versus interest rate.
Use real offer documents
Why the payoff amount and fees matter
The balance shown in an online account may not be the exact amount needed to close the loan on a particular date. Ask the current lender for a payoff quote and use the closest available amount. Review the refinance disclosure for origination, title, registration or other mandatory charges, and do not enter optional products as if they were required fees.
This calculator treats the fee as cash paid today. If the fee will be financed, add it to the payoff amount instead and enter $0 in the fee field.
Protect yourself
Watch for auto-refinancing scams
The Federal Trade Commission warns about companies that promise lower payments, demand an advance enrollment fee or tell borrowers to stop paying their current lender. Continue paying the existing lender until a legitimate refinance is completed and the old loan is confirmed closed.
No calculator can guarantee approval or a lower rate. Compare written offers from established lenders and verify the lender before sharing financial information.
Scope and limitations
What this estimate includes
The comparison assumes fixed-rate loans with equal monthly payments made on time. It does not model daily simple-interest timing, late fees, optional products, taxes, changing rates or a lender’s rounding rules. Actual disclosures and payoff documents control.
This is an educational planning estimate, not a loan offer or individualized financial advice.