Refinance Payment Formula:
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The car refinance payment is the new monthly amount you would pay after refinancing your auto loan. It's calculated based on the new principal amount, interest rate, and loan term.
The calculator uses the standard loan payment formula:
Where:
Explanation: The formula accounts for compound interest over the life of the loan to determine the fixed monthly payment amount.
Details: Calculating your potential refinance payment helps determine if refinancing will save you money or lower your monthly payments.
Tips: Enter the new principal amount (remaining loan balance), the monthly interest rate (annual rate divided by 12), and the new loan term in months.
Q1: When should I consider refinancing my car loan?
A: Consider refinancing when interest rates have dropped significantly since you got your original loan or if your credit score has improved.
Q2: Does refinancing extend my loan term?
A: It can, but doesn't have to. You can choose a shorter term to pay off faster or longer term for lower payments.
Q3: Are there fees for refinancing?
A: Some lenders charge origination fees or other costs. These should be factored into your decision.
Q4: Can I refinance if my car is underwater?
A: It's more difficult but possible with some lenders if you meet their requirements.
Q5: How much can I save by refinancing?
A: Savings depend on your current rate versus new rate, loan term, and remaining balance. Use this calculator to compare scenarios.