Auto Loan Refinance Calculator
The loan you have, the offer, and what switching costs
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Educational estimate only. Confirm the assumptions, current rules, fees, and rounding that apply to your situation before making a decision.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Get a payoff quote from your current lender and enter it as the balance, with the number of payments left. The quote includes interest accrued to the payoff date, which your last statement does not.
- 02
Enter the APR you pay now, then the APR and term of the refinance offer. If the offer runs longer than what you have left, the page separates the part of the lower payment that comes from the rate from the part that comes from the extra months.
- 03
Add what switching costs: your state's title and lien re-registration fees, the new lender's origination or processing fee, and any prepayment penalty in the current contract.
- 04
Enter what the car is worth today. Lenders approve and price a refinance on loan-to-value, and a car worth less than the balance is harder to refinance.
- 05
Read the net saving after fees first, then the month the interest avoided covers those fees, then the term table: the same balance at the offered rate over 36 to 84 months, beside the loan you have.
Formula
Current payment = the amortizing payment on the payoff balance at your current APR over the payments left, and remaining interest = that payment × payments left − balance. The new payment and interest are figured the same way at the offered APR and term. Interest saved = remaining interest − new interest, and net saving = interest saved − (title fees + lender fee + prepayment penalty). The break-even month is the first month in which interest paid to date on the current schedule, minus interest paid to date on the new one, reaches the fees. The payment change splits into a rate part (current payment − the payment at the new rate over your remaining term) and a term part (that payment − the new payment).
Example
A $26,000 payoff balance at 9.71% with 54 payments left costs $596 a month and $6,196 more in interest. A refinance at 6.15% over 60 months costs $504 a month and $4,268 in interest, so it saves $1,928 of interest. After $100 of title and lien fees and a $250 lender fee the net saving is $1,578, and the fees are earned back in month 5. Of the $92 drop in the payment, $44 comes from the rate and $48 from adding six payments, which costs $438 of interest; keeping the 54-month term at 6.15% instead gives a $552 payment and a net saving of $2,016. At 84 months the payment would fall to $382, but the refinance would cost $216 more than it saves. With the car worth $27,000, the loan-to-value is 96%.
Definitions
- Payoff quote
- The amount a lender will accept to close the loan on a given date, including interest accrued to that date. It is good for a set number of days and is higher than the balance on your last statement.
- Loan-to-value (LTV)
- The loan balance divided by what the car is worth. Above 100% you owe more than the car would fetch, which lenders treat as extra risk.
- Break-even month
- The first month in which the interest a refinance has avoided covers what the refinance cost. Leaving the loan before then loses money.
- Term extension
- Refinancing over more months than you have left. It lowers the payment without saving anything, and adds interest on top of what the rate change saves.
- Origination fee
- A lender's charge for setting up a loan, sometimes called a processing fee. It is a cost of refinancing whether you pay it in cash or roll it into the balance.
Good to know
Two ways a payment falls, and only one of them saves money
A car payment is set by three things: the balance, the rate and the number of payments left. A refinance can change the last two, and the monthly figure on the offer mixes them together. Pull them apart and the offer reads differently. On the default figures, a $26,000 payoff balance at 9.71% with 54 payments left costs $596 a month. The offer is 6.15% over 60 months, and the payment falls to $504, a drop of $92. Now hold the term at 54 months and change only the rate: the payment would be $552. So $44 of the drop is the rate and $48 is the six extra payments. The first part is money you no longer owe. The second is the same balance spread thinner, and it is not free: stretching to 60 months adds $438 of interest against refinancing at the same rate over the months you had left. That is why the page reports the net saving at your remaining term beside the offer's: $2,016 against $1,578 here. Push the stretch far enough and the saving disappears. The same balance at 6.15% over 84 months has a payment of $382, $215 below today's, and costs $216 more than it saves once fees are paid. The reason is the shape of an amortizing loan. Early payments are mostly interest and principal falls slowly, so every month added to the end is a month in which interest is still charged on a balance that has barely moved. A lower payment can be the right choice when cash flow is the problem. It just should not be mistaken for a saving.
Why the break-even is counted in interest, not payments
Most refinance calculators divide the fees by the monthly payment saving and call the result the break-even. On a refinance that keeps the same term that shortcut is close enough. On one that changes the term it can be badly wrong, because the payment saving and the interest saving are no longer the same thing. Take the 84-month version of the default offer. The payment falls $215, so $350 of fees divided by $215 says the refinance pays for itself in under two months. In fact it never does: over the life of the loan it charges $216 more than it saves. The payment shortcut counted as saving the part of the drop that came from stretching the loan. This page asks a different question: if you sold the car, traded it in or paid the loan off in a given month, would you be ahead? That depends on interest paid, not on payments, because the principal part of a payment is not a cost; it reduces what you owe, and a sale or payoff settles whatever balance is left. So the page runs both schedules month by month, adds up the interest charged on each, and reports the first month in which the interest avoided so far covers the fees. On the default offer that is month 5. Before month 5, leaving the new loan means the $100 title fee and $250 lender fee cost more than the refinance saved. After it, you are ahead. When the break-even reads never, the fees outrun the interest avoided whatever you do, and the only thing the refinance buys is a lower payment.
What a lender weighs, and what switching involves
A refinance is a new loan, underwritten from scratch, and the rate it carries depends on the same things the first loan did. The largest is credit tier. Experian's figures for the second quarter of 2026 put average new-car rates at 4.41% for super prime borrowers (VantageScore 781-850), 6.15% for prime, 9.71% for near prime, 13.52% for subprime and 16.11% for deep subprime, with used-car loans at 6.29%, 8.81%, 13.93%, 19.10% and 21.62%. The default example is a borrower who signed at the near-prime average and has since reached prime, one of the clearest cases in which a refinance pays. The second is the collateral. Lenders compare the balance with what the car is worth, and a loan-to-value above 100% means the car would not cover the debt if it were repossessed and sold. Each lender sets its own limits on loan-to-value, and on the age and mileage of the cars it will refinance, so an underwater loan can be harder to place or priced higher. At the default $26,000 balance on a $27,000 car the ratio is 96%. The mechanics are simpler than a mortgage refinance. The new lender pays off the old one using a payoff quote, which includes interest accrued to the payoff date and expires after a set number of days. The lien on the title then moves to the new lender, and your state charges a fee to record it. Some lenders add an origination or processing fee. And if the old contract has a prepayment penalty, that is a cost of switching too. Everything on that list goes against the saving before a refinance is worth anything.
Refinancing a loan that carries the new interest deduction
From tax year 2025 through 2028, interest on a loan for a new vehicle with final assembly in the United States, bought for personal use and taken out after December 31, 2024, is deductible up to $10,000 a year, reduced above $100,000 of modified adjusted gross income ($200,000 joint). Refinancing such a loan raises two questions, and the final regulations published on September 8, 2026 (T.D. 10054) answer both. First, does the new loan still qualify? Yes, but only up to the balance of the qualifying loan it pays off, and only if it is secured by a first lien on the same vehicle. Borrow more than the payoff, to take cash out or to roll in other costs, and the interest on the extra does not qualify. A loan taken out before 2025 does not become eligible by being refinanced after it: the regulations decline to extend the deduction to it, citing the statute's plain language. Second, what is the saving worth after tax? Less than the interest figure suggests. If the old loan's interest was deductible, part of every interest dollar was already being paid by a tax saving, so avoiding that dollar saves less. At a 22% marginal rate, the default refinance's $1,928 of interest avoided is worth about $1,504 after tax for as long as the deduction applies. Two details point the other way. Interest avoided after 2028 is saved in full, because no deduction applies then. And the regulations treat origination-related charges and prepayment penalties as qualifying interest when they are characterized as interest for federal tax purposes, so some refinance costs may themselves be deductible. Keep the lender's Form 1098-VLI for each loan.
Frequently asked questions
When does it make sense to refinance a car loan?
When the rate falls far enough that the interest avoided covers the fees well before you expect to sell or pay off the car. That usually means your credit has moved up a tier since you signed, or the first loan was written above the rate you qualified for. On the default figures, moving $26,000 from 9.71% to 6.15% saves $1,928 of interest against $350 of fees, and the fees are earned back in month 5.
Does a lower monthly payment mean I am saving money?
Not necessarily. A payment falls for two reasons, a lower rate or more months, and only the first saves money. In the default example the payment drops $92: $44 of that is the rate and $48 is stretching 54 remaining payments to 60, which adds $438 of interest. Stretch the same balance to 84 months and the payment falls $215, while the refinance costs $216 more than it saves.
How is the break-even month worked out?
It is the first month in which the interest you have avoided so far covers the fees. Dividing the fees by the monthly payment saving gives a different and often misleading answer whenever the term changes, because a longer loan lowers the payment at once while charging more interest overall. Sell, trade in or pay off the car before the break-even month and the refinance has cost you money.
Should I roll the refinance fees into the new loan?
You can, but you then pay interest on them. On the default offer, rolling in $350 of fees raises the payment from $504 to $511 and adds about $57 of interest over 60 months. Paying the fees in cash keeps the loan smaller; rolling them in keeps cash in the bank. Either way the fees count against the saving.
Can I refinance if I owe more than the car is worth?
Sometimes, but lenders set their own limits on how far past the car's value they will lend, and an underwater loan is harder to place. A refinance does not reduce the shortfall. A longer term keeps you underwater longer, because the balance falls more slowly while the car keeps losing value.
What happens to the car loan interest deduction if I refinance?
If the original loan qualifies for the 2025-2028 deduction (a new, US-assembled vehicle for personal use, financed after 2024), the final regulations published on September 8, 2026 keep the new loan qualifying only up to the balance it pays off, and only if it is secured by a first lien on the same vehicle. Extra cash borrowed on top does not qualify, and a loan that never qualified does not start qualifying because it was refinanced.
What rates are car buyers getting now?
Experian's State of the Automotive Finance Market for the second quarter of 2026 put average new-car rates at 4.41% for super prime borrowers (scores 781-850), 6.15% prime, 9.71% near prime, 13.52% subprime and 16.11% deep subprime. Used-car loans averaged 6.29%, 8.81%, 13.93%, 19.10% and 21.62%. These are averages across loans made, not offers, so compare at least two quotes.