Car Refinance Calculator — Monthly Payment & Interest Saved
Enter your remaining loan balance, current payment, months left, the new interest rate and new term to see the new monthly payment and how much interest refinancing could save.
months
%
months
Principal and interest at the new rate — excludes any refinancing fees
20,093.59
New totalPrincipal
89.6%
New interest
10.4%
- 1
Monthly interest rate
r = 5.5% ÷ 12 ÷ 100 = 0.004583 - 2
Growth factor
(1+r)ⁿ = 1.004583ⁿ = 1.2455 - 3
New monthly payment
18,000 × 0.004583 × 1.2455 ÷ (1.2455 − 1) = 418.62
How does this calculator work?
New payment = Balance × r × (1+r)^n ÷ ((1+r)^n − 1) where r = new APR ÷ 1200 and n = new term months. Interest saved = (old remaining interest) − (new total interest). Deduct any refinancing fees (origination, title transfer) from the savings to get the true net benefit.
Formula
How this is calculated
When you refinance, your existing lender is paid off by the new loan and you start a fresh amortisation schedule. The new monthly payment uses the standard fixed-rate amortisation formula: payment = P × r × (1+r)^n ÷ ((1+r)^n − 1), where P is your current outstanding balance, r is the new monthly interest rate (APR ÷ 12 ÷ 100) and n is the new term in months. If the new rate is 0%, the payment is simply balance ÷ months.
The savings comparison is straightforward: the current remaining cost is your existing monthly payment multiplied by the months left — that total includes the remaining principal plus all remaining interest. The new total is the new payment times the new term. Interest saved is the difference in the two interest components. A lower rate reduces the interest for the same term; a shorter term also saves interest but may raise the monthly payment.
This calculator does not include refinancing fees such as origination fees, title transfer or prepayment penalties on the old loan. To find the true net saving, subtract any lender fees from the stated interest saved. Refinancing is generally most worthwhile when rates have dropped significantly since the original loan, when there is still a substantial balance remaining, or when your credit score has improved enough to qualify for a materially better rate.
Frequently asked questions
Refinancing typically saves money when the new rate is at least 1–2 percentage points lower than the current rate, when a meaningful balance remains (so there is enough interest left to save), or when your credit score has improved. It makes less sense near the end of a loan when most interest has already been paid.
No — a longer new term lowers the monthly payment but increases total interest paid. If your goal is to save money overall, keep the new term the same as (or shorter than) the time remaining on the current loan. Extending the term trades monthly cash flow for higher total cost.
Common refinancing costs include a lender origination fee (often $0–$500), a state title transfer fee ($20–$100 in many US states), and occasionally a prepayment penalty on the original loan. Subtract these from the "interest saved" figure to get the real net benefit.
Also known as
TG we-Calculate Editorial Team. (2026). Car Refinance Calculator — Monthly Payment & Interest Saved [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/car-refinance-calculator
TG we-Calculate Editorial Team. "Car Refinance Calculator — Monthly Payment & Interest Saved." TG we-Calculate. 2026. https://we-calculate.com/calculator/car-refinance-calculator.
TG we-Calculate Editorial Team, "Car Refinance Calculator — Monthly Payment & Interest Saved," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/car-refinance-calculator
@misc{wecalculate_car_refinance_calculator, title = {Car Refinance Calculator — Monthly Payment & Interest Saved}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/car-refinance-calculator}}, year = {2026}, note = {TG we-Calculate} }
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