Auto Refinance Calculator
Use the auto loan refinance calculator to find potential savings
Bankrate’s auto refinance calculator will help you determine how much you can potentially save on interest, monthly payments or both. Simply input the details of your current loan: your monthly payment, remaining balance, interest rate and the remaining loan term.
Next, explore how a new loan could potentially save you money. After figuring out what adjusted term and interest rate work best for you and your wallet, it is wise to apply for loan prequalification — which ensures you walk away with a good deal. Check out current offers to compare different auto loan rates and terms after calculating what you want your new loan to look like.
What refinancing is and how it works
Refinancing allows you to replace your current loan with a new one. This new loan will hold better rates and terms and thus save you money each month. Your existing loan will be replaced with one from a new lender, but it is always wise to calculate potential savings if you stayed with your current bank or lender.
The choice to refinance does not come without risk. By extending the lifetime of your loan you are more likely to become upside-down on your vehicle loan. To avoid this, stay away from long repayment terms — which can feel enticing when refinancing.
It is also important to consider that lenders do hold specific requirements when it comes to refinancing. Many banks and lenders will look for a clean vehicle title, history of payments and the value and age of the vehicle.
When should you refinance an auto loan?
Deciding to refinance your auto loan comes down to saving you money on interest, reducing your monthly payment or both. Consider these situations when determining if you want to refinance your current auto loan:
- You received dealer financing. Dealers often add a few points as a commission. So, if your original loan was financed by your car dealer’s preferred lenders, there is a good chance you didn’t score the best rate possible.
- Your credit score improved. A difference of just 30 points on your credit score can make a significant impact on your rate. If your score has improved since your original auto loan, you may save money by refinancing.
- You want to lower your payment. Refinancing for a longer loan term can reduce your monthly payment.
How to apply for an auto refinance loan
The process of refinancing your auto loan is fairly similar to the process that came with applying for your initial vehicle loan. Follow these five steps before signing off on a new refinanced auto loan.
- Decide if refinancing is best for you financially. Compare your current monthly cost with potential savings from the refi process.
- Review your current loan. Understand your current rate and how much you would potentially pay in interest.
- Determine the value of your car. Use tools like Kelley Blue Book and Edmunds to find out how much your car is worth.
- Shop around. Compare loan options of at least three different lenders.
- Sign off on the new loan. Choose a loan and walk away with an updated term and rate.
The key to finding the best auto loan comes down to the ability to spend within your financial means. For many drivers, refinancing is a great way to adjust your current loan to better fit your monthly budget. Take advantage of the calculator to understand what a new loan would look like for you and your wallet and check out Bankrate’s best auto refi options.