If your car payment feels heavier than it should, you're not alone — and refinancing could be the fix. This car loan refinance calculator compares your current auto loan terms against a potential refinance offer so you can see exactly how much you'd save, both monthly and over the full life of your loan.
Just plug in your current payment, balance, rate, and remaining term alongside the new rate and term you're considering. The calculator instantly shows your new monthly payment, how much less you'd pay each month, and the total interest you'd save by switching.
Whether your credit score has climbed since you first financed, rates have come down, or you just need some relief in your monthly budget, this gives you the real numbers to decide if refinancing is worth the effort. The good news? For many borrowers, even a modest rate drop can translate into hundreds or thousands of dollars saved.
What Is Car Loan Refinancing?
Refinancing your car loan simply means swapping your current loan for a new one — usually with a different lender and better terms. The new lender pays off your existing balance, and you start making payments to them instead.
The goal is straightforward: get a lower interest rate, and you pay less over time. That might mean a smaller monthly payment, a shorter payoff timeline, or both — depending on the term you choose.
Your car doesn't change. Your ownership doesn't change. You're just restructuring the debt so it costs you less. Think of it like switching cell phone plans — same phone, better deal.
One thing people sometimes mix up: refinancing is not the same as trading in your car or rolling negative equity into a new vehicle loan. You're keeping the exact same car and simply paying it off under better loan terms.
How the Car Refinance Calculator Works
This calculator runs the standard amortization formula on both your current loan and your proposed refinance, then compares them side by side.
The formula:
Monthly Payment = P × [r(1 + r)^n] / [(1 + r)^n - 1]
Where:
- P = Principal (your remaining balance)
- r = Monthly interest rate (annual rate ÷ 12)
- n = Number of monthly payments (years × 12)
Here's what that looks like with real numbers:
Say you owe $30,000 at 8.5% with 4 years left and you're considering refinancing at 4.5% for the same term:
- Current loan: $30,000 × [0.00708 × (1.00708)^48] / [(1.00708)^48 - 1] = $740/month
- Refinanced loan: $30,000 × [0.00375 × (1.00375)^48] / [(1.00375)^48 - 1] = $684/month
That's $56 less per month and $2,683 less in total interest paid over the loan. The calculator handles all of this math instantly — you just enter your numbers.
What the results mean:
- New Monthly Payment — what you'd owe each month after refinancing
- Monthly Savings — the difference between your old and new payment
- Difference in Interest — the total amount of interest you avoid paying over the life of the loan
How to Use This Calculator
- Enter your current monthly payment. The amount you're paying right now on your car loan. Check your bank statement or loan app if you're not sure of the exact figure.
- Enter your remaining loan balance. How much you still owe. Your most recent loan statement will show this, or call your lender and ask for the payoff amount.
- Enter your current interest rate. The APR on your existing loan — it's on your original loan documents and usually on monthly statements too.
- Enter your remaining loan term. How many years you have left. Got 36 months remaining? That's 3 years.
- Enter the new interest rate. The rate from your refinance offer. No quote yet? Try plugging in current averages — borrowers with good credit are seeing 4.5%–6.5% as of early 2026.
- Enter the new loan term. How long you want the new loan to be. Matching your remaining term gives you an apples-to-apples comparison. But try shorter and longer terms too — the results might surprise you.
- Review your results. You'll see your new payment, monthly savings, and total interest savings instantly. Try adjusting the numbers to explore different scenarios.
Practical Examples
Here are four common refinancing situations. Each one shows the before-and-after so you can see the real impact.
Example 1: Credit Score Improved
Sarah financed at 9.5% two years ago when her credit was shaky. She's since rebuilt her score from 620 to 720 and now qualifies for 5.5%.
Current Loan | Refinanced Loan | |
|---|---|---|
Balance | $18,000 | $18,000 |
Interest Rate | 9.5% | 5.5% |
Term | 4 years | 4 years |
Monthly Payment | $450 | $418 |
Total Interest | $3,600 | $2,064 |
Monthly Savings | - | $32 |
Total Savings | - | $1,536 |
Even a "small" monthly savings adds up to real money over the life of her loan.
Example 2: Rates Have Dropped
Mike financed in 2023 when rates were peaking at 8.5%. He has a larger balance and stands to save significantly with today's lower rates.
Current Loan | Refinanced Loan | |
|---|---|---|
Balance | $30,000 | $30,000 |
Interest Rate | 8.5% | 4.5% |
Term | 4 years | 4 years |
Monthly Payment | $740 | $684 |
Total Interest | $5,520 | $2,837 |
Monthly Savings | - | $56 |
Total Savings | - | $2,683 |
A 4-percentage-point rate drop saves Mike nearly $2,700 — and he didn't have to change anything about his car or his life.
Example 3: Extending the Term for Budget Relief
Jessica's $600/month payment became a strain after a job change. She extends her term to free up cash flow — knowing it costs more in total interest, but the breathing room is worth it right now.
Current Loan | Refinanced Loan | |
|---|---|---|
Balance | $20,000 | $20,000 |
Interest Rate | 7% | 6% |
Term | 3 years | 5 years |
Monthly Payment | $600 | $387 |
Total Interest | $1,868 | $3,220 |
Monthly Savings | - | $213 |
Extra Interest Cost | - | $1,352 |
She pays $1,352 more in interest over time, but frees up $213/month — money she needs right now for rent and groceries. That trade-off makes sense for her situation.
Example 4: Shortening the Term to Save Big
David wants to pay off his car faster and save the maximum on interest. He accepts a higher monthly payment in exchange for a much shorter loan.
Current Loan | Refinanced Loan | |
|---|---|---|
Balance | $25,000 | $25,000 |
Interest Rate | 7.5% | 5% |
Term | 5 years | 3 years |
Monthly Payment | $501 | $749 |
Total Interest | $5,060 | $1,964 |
Extra Monthly Cost | - | $248 |
Total Savings | - | $3,096 |
David's payment jumps by $248/month, but he saves over $3,000 in interest and owns his car free and clear two years sooner.
Should You Refinance? A Quick Decision Checklist
Run through these questions. If you check three or more, refinancing is probably worth exploring:
- Your credit score is 50+ points higher than when you got the loan
- Current market rates are at least 1–2% lower than your existing rate
- You have more than 12 months left on your loan
- Your car is less than 10 years old with under 150,000 miles
- You're not planning to apply for a mortgage or other major loan in the next 6 months
- Your car is worth more than (or close to) what you owe on it
When refinancing probably doesn't make sense:
- You have less than a year of payments left — the savings won't be significant enough
- Your car is older than 10 years or over 150,000 miles — most lenders won't touch it
- You're "upside down" on the loan (owe more than the car is worth) — lenders see that as high risk
- You recently applied for a mortgage or plan to soon — the hard inquiry could hurt your score at the worst time
- The fees would eat up most of your savings
Current Auto Refinance Rates by Credit Score (2026)
Knowing where you fall helps you estimate what rate to plug into the calculator:
Credit Score Range | Classification | Typical Refinance APR (2026) |
|---|---|---|
781–850 | Exceptional | 4.5%–5.0% |
740–780 | Excellent | 5.0%–5.8% |
670–739 | Good | 5.8%–7.5% |
580–669 | Fair | 7.5%–12.0% |
300–579 | Poor | 12.0%–20.0%+ |
These ranges are based on average lender data as of January 2026. Your actual offer depends on your full financial picture, the vehicle, and the lender — but this gives you a realistic starting point.
For context, the average 60-month new car loan rate is currently around 7%. If you're paying more than that, there's a good chance you can do better.
What Affects Your Refinance Rate?
Your rate isn't just about your credit score — though that's the biggest piece. Here's what lenders are looking at:
Factor | Why It Matters |
|---|---|
Credit score | The single biggest factor. 740+ unlocks the best rates. Below 620, you'll have limited options. |
Loan-to-value ratio | The less you owe relative to your car's value, the less risky you are to a lender. |
Loan term | Shorter terms almost always come with lower rates — lenders take on less risk. |
Vehicle age and mileage | Lenders prefer newer cars with fewer miles. A 2021 sedan with 40K miles gets a better rate than a 2015 with 130K. |
Loan amount | Most lenders have minimums — typically $4,000 to $7,500. Below that, refinancing may not be available. |
Income and DTI ratio | Lenders want to see that your car payment fits comfortably within your overall budget. |
One thing that catches people off guard: the age and mileage cutoffs are firm for many lenders. If your car is pushing 10 years old, don't wait — your refinancing window may close.
Tips for Getting the Best Refinance Deal
Know your credit score before you do anything else. If you're sitting at 680 and a little patience could get you to 720, it might be worth waiting a month or two to pay down credit card balances first. That jump could shave a full percentage point off your rate.
Get quotes from at least 3–4 lenders. Banks, credit unions, and online lenders all price differently. Credit unions in particular tend to offer the most competitive auto refinance rates. Here's the trick: if you submit all your applications within a 14-day window, the credit bureaus typically group the inquiries as a single hit on your score.
Don't fall for the "lower payment" trap. A lender might offer you a much lower monthly payment — but stretch your term from 3 years to 7. Run both scenarios through this calculator and look at the total interest line. That's the number that tells you whether you're actually saving money or just spreading the cost out.
Ask about fees upfront. Most auto refinances don't have origination fees, which is a nice perk compared to mortgage refinancing. But check for title transfer fees in your state ($5–$75 typically), lien recording fees, and whether your current lender charges a prepayment penalty.
Calculate your break-even point. If refinancing costs you $200 in fees and saves you $50/month, you break even in 4 months — that's a no-brainer. If fees are $500 and you're saving $25/month, it takes 20 months to break even — still worthwhile if you have 3+ years left, but worth thinking through.
Don't sit on it too long. Cars depreciate every month, and as your vehicle ages, fewer lenders will refinance it. The sweet spot is typically when your car is 2 to 7 years old. After that, options narrow quickly.
A Note on This Calculator
These results are estimates based on the numbers you enter. Your actual refinance offer will depend on your credit profile, vehicle details, and the specific lender's requirements. Think of this calculator as your first step — it tells you whether refinancing is worth pursuing. Once you have that answer, shop around, compare real offers from multiple lenders, and make sure the total savings (not just the monthly payment) make the switch worthwhile.