Car Loan Refinance and Early Payoff Calculator

Worked example: refinancing

You owe $22,000 at 9.5% with 48 payments left, a payment of $552.71 and $4,530.03 of interest still to pay. A lender offers 6.5% for 48 months with $300 in fees paid upfront.

• New payment: $521.73, about $30.98 less a month.
• Total saved after fees: $1,187.04. The fees are paid back by the lower payments in 10 months.
• Take the same rate over 72 months instead and the payment drops to $369.82, but you pay $396.90 more than keeping the old loan. A better rate is wasted if the term stretches too far.

Worked example: extra payments

On the same $22,000 at 9.5% with 48 payments left, adding $100 a month pays the loan off 8 months early and saves $837.68 in interest. A one-time $2,000 payment now instead saves $849.69 and finishes 5 months early.

When refinancing makes sense

• Your rate is well above what you qualify for now. Common reasons: your credit has improved since you bought the car, rates have fallen, or you took dealer financing without comparing offers.
• The new term is no longer than what you have left. The CFPB notes that with a longer loan "you'll ultimately pay more in interest over the life of the loan," and that "longer loans are more likely to result in your owing more than the vehicle is worth."
• The fees pay for themselves quickly. The calculator shows how many months of lower payments it takes.

Compare several lenders, including credit unions. The CFPB says that when you shop for an auto loan, multiple credit checks "will generally only count as a single inquiry if they're made within 14 to 45 days of each other," so keep your rate shopping inside that window.

Frequently asked questions

What is the payoff balance?

The amount needed to close the loan today, including interest since your last payment. Your lender can give you a payoff quote; it is usually a little more than the balance on your statement.

Are extra payments or refinancing better?

They work together. Refinancing lowers the rate on every dollar you owe; extra payments reduce the dollars you owe. If you can get a lower rate, refinance first, then keep paying your old, higher payment on the new loan to finish even sooner.

Can I refinance if I owe more than the car is worth?

It can be harder, since the car is the collateral. Check with lenders, and see the negative equity calculator to estimate when you will be above water.