Auto Loan Refinance Calculator
Calculate how much you may be able to save by refinancing your current auto loan.
Current loan
New loan
By refinancing, you will:
Please double check your monthly payment. It's too low to repay the loan.
Auto Loan Refinance Calculator
Refinancing your car loan replaces your original auto loan with a new one to lower your monthly payment. Our auto refinancing calculator can help you compare loans and find out how much you could save by refinancing.
MORE: NerdWallet’s top auto refinance loan picks
How to use this calculator
Put the following information into the calculator to see how much you could save by refinancing your auto loan.
1. Current auto loan details
This is information about the car loan you have now. You need to know:
How much you still owe on your loan (the remaining balance).
Your monthly payment.
Your interest rate.
Your auto loan details are usually on your latest car loan statement. You can also log into your online account on your lender’s website or call your lender to ask for the information.
2. New loan details to test
This is where you can test different scenarios with the calculator to see how it affects your car loan. You’ll put in the following information:
The length of the new loan. This is how long you will have to pay it off. Auto refinance loans generally have terms from 12 to 96 months, but the actual range varies by lender.
The new auto loan’s interest rate. This is also referred to as the annual percentage rate (APR). The interest rate you qualify for depends on factors like your credit score, the lender you choose and the loan term.
To get an idea of what APR you might qualify for, apply to prequalify or get preapproved with several auto refinancing lenders. This isn’t final loan approval, but it’s a good way to see if you will qualify and at what interest rate.
Some lenders use the terms "auto loan prequalification" and "preapproval" interchangeably, but usually prequalification is based on a soft credit inquiry, which won’t affect your credit scores. Preapproval often uses a hard credit inquiry, which can temporarily lower your credit scores.
When applying to multiple lenders to compare loan rates, find out if they will use a hard credit inquiry. If so, submit all applications within a 14-day period, so credit inquiries are treated as one and have less impact on your credit scores.
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Scenarios to try with the calculator
When using the calculator, you can try different scenarios to see how they affect your car loan. For example, you can use:
Your same loan term with a different interest rate. See if a lower rate will reduce your monthly payment enough to make refinancing worth it.
A shorter term and lower interest rate. This will raise your monthly payment but might save you money in the long run. If the shorter term lands you a higher payment, can you manage the increase? The benefit is paying off your loan sooner and saving on total interest.
A longer term without changing your interest rate. This will lower your monthly payment but cost you more over the life of the loan. The goal here is to make a payment that’s too high more manageable.
See refinancing in action
Here are a few examples of how these scenarios can change one loan.
If you owe $25,000 on a four-year loan at 10% interest, your monthly payment is $630.
If you refinanced with another four-year loan but dropped the interest to 8%, you’d save $19.68 per month and $944.49 over the entire loan.
If you refinanced with a three-year loan and dropped the interest rate to 7%, you would pay $141.93 more per month — but you’d save $2,450.61 by the end of the loan.
If you refinanced with a six-year loan at the same 10% interest, you’d save $166.85 per month but pay $3,106.51 more over the entire loan.
When refinancing an auto loan makes sense
Here are some situations when it can make sense to look into auto refinancing.
Interest rates have dropped. If auto loan rates in general fall below your current car loan rate, refinancing could be an opportunity to take advantage.
Your credit has improved. If you had poor credit when you got your car loan, you may have a high interest rate. You might now qualify for a lower interest rate if you’ve made consistent, on-time payments for six to 12 months. You can check your credit report and score for free through NerdWallet.
You took dealer financing without comparing rates. When you got your original loan, the dealership might have charged you a higher interest rate than you could have qualified for elsewhere. This is more likely if the dealership knew you weren’t comparing loan offers. But with refinancing, you can still shop for a lower rate.
Your current payment is too much. Refinancing for a longer term can reduce your monthly payment. However, you’ll pay more interest over the life of the loan, and you could become upside-down on your car loan. That means you could owe more than your car is worth. Still, a longer term may be a better option than missing payments or facing repossession.
Next steps to refinance your car loan
If you decide to refinance your auto loan, you’ll find the process is much like when you got your original car loan. Most lenders let you apply online and show you prequalified offers or conditional approval in minutes.
At some point, you’re likely to need the following information:
Your driver’s license.
Vehicle registration.
Proof of insurance.
The vehicle identification number, or VIN, of your car.
Pay stubs from your current employer or proof of employment.
Your Social Security number.
A statement of loan payoff amount from your current lender.
No matter where you apply, it’s a good idea to get offers from more than one lender to find the best auto refinance rate for you.
Factors such as your car’s age and mileage affect your interest rate, so, your actual savings could be more or less than what the auto loan refinance calculator shows.
You can refinance your auto loan more than once, but some situations might keep you from finding a lender willing to do that.
FAQs
Will it hurt my credit to refinance my car loan?
Your credit score might go down for a short time if you refinance your auto loan, but it should come back up after a few months of on-time payments.
Why does a lender need to know my car’s age and mileage to refinance an auto loan?
Lenders want to know that your car is worth what you owe on your current auto loan. They use your car’s age and mileage to calculate a loan-to-value ratio, which helps them decide if they want to lend you money for a new loan.
Can I refinance any car loan?
No. Some lenders only refinance loans for cars that are over a certain age or mileage and don’t refinance loans for newer cars. Others won’t refinance cars that are beyond a certain age or have different loan terms if they do. Lenders often require a car to have a minimum value as well, such as $5,000, to refinance a car loan.
