Car Loan Refinance Calculator

Compare your current auto loan with a new rate and term to see your new payment and how much you could save. Enter your numbers and press Calculate.

Written by TopicDrill Editorial Team·Updated June 2026

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Balance over time

Refinanced Current

How car loan refinancing works

When you refinance, a new lender pays off your existing auto loan and issues a fresh loan in its place. The new loan has its own rate and term, so your monthly payment and total interest change. The chart above compares how the balance falls under each loan, which makes it easy to see which option pays off faster.

The biggest lever is the interest rate. A lower rate means more of every payment goes to principal instead of interest. If your credit has improved or market rates have dropped since you bought the car, refinancing can free up cash each month.

A quick example

Say you owe $22,000 with 48 months left at 9.5%. Your payment is about $554 a month. Refinance the same balance over 48 months at 6.5% and the payment falls to roughly $522, saving around $32 a month and over $1,500 in interest across the loan.

Things to keep in mind

Watch the term carefully. Extending the loan can lower the monthly payment but raise the total cost. For consumer guidance on auto loans, the Consumer Financial Protection Bureau is a reliable source. You can also compare options with our other free calculators.

Frequently asked questions

How does refinancing a car loan save money?

Refinancing replaces your current loan with a new one, usually at a lower interest rate. A lower rate means less interest accrues each month, which can reduce your payment and the total you pay over the life of the loan. Keeping the same term while lowering the rate gives the clearest savings.

Does a longer new term always lower my payment?

A longer term spreads the balance over more months, so the monthly payment usually drops. However, stretching the term can increase the total interest you pay even at a lower rate. This calculator shows both the monthly payment and the lifetime cost so you can see the full picture.

When is the best time to refinance a car loan?

Refinancing tends to make the most sense when interest rates have fallen, when your credit score has improved since you took the loan, or when your original rate was high. It is most effective earlier in the loan, when more interest is still left to pay.

Are there costs to refinancing?

Some lenders charge title transfer or registration fees, and a few original loans have prepayment penalties. These costs are usually small, but you should confirm them and weigh them against the savings this calculator estimates before signing.

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