1. Calculators
  2. Auto Calculators
  3. Auto Refinance Calculator

auto refinance calculator

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How to use Credit Karma’s auto refinance calculator

Auto refinancing could be a good option if you’re interested in more favorable terms than your current auto loan. Essentially, you take a new loan out and use it to pay off your old loan. This may make sense to help achieve your financial goals or save money, but is it right for you?

Our auto refinance calculator takes information you provide about your current auto loan, as well as about a potential auto refinance loan. Next, it runs the numbers to help you determine if refinancing your auto loan could make sense. It can show you if you’d end up paying more or less interest with a new loan and how your monthly payments may change.

Our auto refinance calculator uses the following information to help you determine if refinancing your auto loan may be worth it for your situation:

Keep in mind that other factors may also affect an auto loan refinance. This auto calculator doesn’t include calculations for prepayment penalties or interest accumulated after your most recent auto loan payment. Penalties and interest may have to be paid when you pay off your current loan. The accuracy of the inputs you provide will also impact outputs, so for best results, try to be realistic about your estimated interest rates, loan terms and loan amounts.    

Current loan balance

Your current loan balance is the amount you owe on your auto loan. This number will differ slightly from the amount owed on your old auto loan because of interest that may have accrued since you made your most recent payment. You should be able to find your auto loan balance or a payoff amount on your auto loan statement. If you can’t find the information on your statement, you can call your auto lender or visit its online portal.

Current monthly payment

You should be able find your monthly payment amount on the monthly statement for your auto loan. You can also check your most recent payment to see how much you paid. This assumes you have a fixed-rate auto loan and that your most recent payment didn’t include any late payment fees or other fees.

Current interest rate

Your auto loan’s current interest rate should be printed on your auto loan statement. If you can’t find it, consider looking at your original auto loan paperwork if you have a fixed interest rate loan or contact your lender.

Keep in mind that your APR, or annual percentage rate, is slightly different than your interest rate — your APR also includes fees. APR is generally a better measure of your true cost of borrowing money.

Refinance loan amount

The refinance loan amount is the amount you plan to borrow with the new auto refinance loan. This may be lower than your existing loan amount if you plan to pay off part of the current loan with cash. If you need extra money to pay prepayment penalties or accrued interest on your old loan, make sure to include it in your refinance loan amount.

Refinance loan term

This is the length of the new auto refinance loan you plan to take out. Shorter loan terms may result in lower interest rates and less total interest paid compared to longer loan terms. But the trade-off may be a higher monthly payment. Longer loan terms allow you to stretch out the loan repayment over a longer period, which could reduce your monthly payment. But you may pay more interest over the life of the loan and face higher interest rates.

Refinance interest rate

The refinance interest rate is the rate you expect to refinance your auto loan. You can compare auto refinance rates to see what you may qualify for. Your loan term, the current interest rate environment, your credit scores and many other factors can influence your refinance rate. If possible, shop around to compare the different rates you qualify for.

How to refinance a car loan

Wondering how to refinance an auto loan? It’s a fairly straightforward process. First, you should take note of information about your existing auto loan, including your monthly payment, interest rate and the remaining balance owed.

Next, you need to figure out why you want to refinance your auto loan and if achieving that goal is possible. You may want to lower your interest rate along with the amount of interest you’ll pay overall on the loan. If this is the case, you’ll need to evaluate if interest rates have dropped since you first got the loan, if your credit has improved, and if you can afford to shorten your loan term and make higher monthly payments.

Once you have a goal in mind, you can start the process of figuring out if you qualify for an auto refinance loan. You’ll need the same type of information your lender required when you originally took out your loan. This could include your personal information, proof of income, information about your car and evidence of auto insurance. Additionally, the lender may need information about your current auto loan.

One way to see if you may qualify is by applying for prequalification with lenders. Lenders generally only use a soft inquiry to check your credit in this process — which won’t affect your credit scores. While this isn’t a guaranteed approval, it may give you an idea of what type of auto refinance loan you may qualify for. If you’re comfortable with everything, you can apply for an auto loan with the lender of your choice.

Should I refinance my car?

Figuring out if or when you should refinance your auto loan depends on many factors, including your personal financial situation. You can run the numbers using our auto refinance calculator to estimate the financial impact of refinancing. Additionally, answering questions about your situation could help you determine if looking into refinancing may be a smart move for you.

  • Has my credit improved?
  • Have interest rates dropped overall in the economy?
  • Do I need a lower monthly payment?
  • Do I want to pay my loan off faster and pay less interest overall?

Having strong credit can help you qualify for more competitive refinancing terms. You may still be able to refinance your auto loan with bad credit, too, but make sure to examine any potential loan terms closely.