Auto Loan Refinance Calculator Monthly Payment

An auto loan refinance calculator estimates your new monthly payment and total interest from the amount refinanced, annual percentage rate (APR), and loan term. Enter the balance you plan to refinance, the rate and term quoted by a lender, and compare the estimate with your current payment.

Formula

The calculator uses the standard fixed-payment loan formula. It divides the amount borrowed, plus interest over time, into equal monthly payments:

Monthly payment = P × r ÷ [1 − (1 + r)⁻ⁿ]

• P is the refinanced loan amount in dollars.
• r is the monthly interest rate, calculated as APR ÷ 1,200. APR is entered as a percentage per year; for example, 8% gives a monthly rate of 0.0066667.
• n is the number of monthly payments, calculated as the term in years × 12.

The output rounds the monthly payment to cents. Estimated total interest is the rounded monthly payment multiplied by the number of payments, minus the amount borrowed. This makes the displayed total use the same payment shown in the first result. Calculations assume APR is the rate applied to the balance; an APR that incorporates fees may not match a lender’s exact interest calculation.

Worked Example

Using the default inputs—$20,000, an 8% APR and a five-year term—the calculation is:

1. Monthly rate: 8 ÷ 1,200 = 0.0066667.
2. Number of payments: 5 × 12 = 60.
3. Monthly payment: 20,000 × 0.0066667 ÷ [1 − (1 + 0.0066667)⁻⁶⁰] = $405.53, rounded to cents.
4. Total of rounded payments: $405.53 × 60 = $24,331.80.
5. Estimated total interest: $24,331.80 − $20,000 = $4,331.80.

The payment and interest figures are estimates under the stated assumptions, not a lender’s offer or payoff quote.

Assumptions

• The interest rate stays fixed for the full term.
• Payments are equal, made monthly, and begin according to a regular schedule.
• Interest is modelled monthly at APR ÷ 12.
• Fees, taxes, insurance, add-on products, and other charges are not included unless they are part of the amount entered.

What to Enter for a Refinance

For the loan amount, use the balance that would actually be financed—not necessarily the car’s purchase price or the original loan amount. A lender’s payoff figure can differ from the balance shown on a recent statement because interest may accrue between statement dates. If eligible charges or fees are added to the new loan, include them in the amount only when the lender confirms they will be financed.

Use the quoted APR and term for the proposed loan, rather than assuming a rate or choosing one based on a general market figure. Rates, fees, loan limits, and approval criteria vary and are inputs to check directly with the lender. Enter the term in years: the calculator converts it to months. For example, a 48-month term is four years.

To compare with the current loan, calculate its payment separately using its remaining principal, APR, and remaining term. Compare more than the monthly payment: a longer term can reduce the required monthly amount while increasing the number of payments and potentially the total interest. A lower payment alone does not show the full cost of the new arrangement.

How to Read the Results and Compare Loans

The monthly payment is the modelled principal-and-interest amount. It is not necessarily the complete amount due each month if other costs are billed separately. Total interest is the sum of the rounded payments less the amount borrowed; it is not the total paid. Add the principal back to see the estimated total of payments.

For a useful comparison, keep the amount being refinanced consistent where possible, and enter each option’s actual APR and term. If one option includes financed fees, show those fees in its loan amount and recognize that the amounts being compared differ. Also consider the remaining payments on the existing loan: comparing a new full-term total with the original loan’s full-term interest would not be an apples-to-apples comparison.

• Record the current loan’s payoff amount, APR, remaining term, and payment.
• Get the proposed loan’s APR, term, financed amount, payment schedule, and itemized costs from the lender.
• Use the calculator for an estimate, then compare total payments and interest over the relevant period.
• Check whether the lender’s quoted payment includes any charges that this calculator does not model.

Common Limits and Mistakes

A frequent error is entering the original amount borrowed instead of the current payoff amount. Another is comparing a monthly payment from a longer term with a payment from a shorter term and treating the smaller number as proof that the total cost is lower. The calculator does not determine whether a vehicle’s value, loan balance, or borrower meets any lender’s requirements.

APR and term must use the displayed units: enter APR as a percentage such as 8, not as 0.08, and term in years, not months. The payment formula is for a positive APR and equal monthly payments. Actual schedules can differ because of payment dates, daily interest calculations, rounding practices, variable rates, or charges. The calculator does not model early payoff, extra payments, late payments, or a changing balance.

Frequently Asked Questions

How do I calculate a refinanced car payment?
Enter the amount to be financed, the proposed APR, and the loan term. The calculator converts APR to a monthly rate and applies the fixed-payment formula to estimate the monthly principal-and-interest payment.

Should I enter my car’s value or my loan payoff amount?
Enter the amount the new loan would finance. This is generally based on the payoff amount, adjusted for any charges or other amounts the lender confirms will be included—not simply the vehicle’s value.

Why can a refinance lower my payment but increase total interest?
A longer repayment term spreads payments over more months. That can lower each payment while extending the time interest is charged. Compare the payment count and total estimated interest as well as the monthly figure.

Does this calculator include refinance fees?
No separate fee input is provided. If the lender confirms that fees are financed, include them in the loan amount to estimate their effect on payment; otherwise, the displayed results exclude them.

Why is the lender’s payment different from this estimate?
The lender may use a different payoff amount, payment date, interest method, rounding convention, or fee treatment. Check the lender’s written figures and ask which costs are included in its quoted payment.

This result is an estimate for educational purposes, and the lender’s disclosure gives the exact figures.

Related

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• Auto Loan Calculator With Trade-In and Amount Owed (Negative Equity)

in p | Loan amount | $ | 20000 | 1 | 100000000
in apr | Interest rate (APR) | % | 8 | 0.01 | 100
in yrs | Loan term | years | 5 | 0.0833 | 50
out pmt | Monthly payment | $ | p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2