Auto Loan Refinance Calculator: Estimate Payments and Interest

An auto loan refinance calculator estimates a new monthly payment and total interest from the balance you want to refinance, the new APR, and the new loan term. Enter the figures offered by a lender to compare the new loan’s scheduled payments with your current loan; the estimate does not include fees unless you add them to the loan amount.

Formula

The calculator uses the standard fixed-payment loan formula. It first finds a monthly payment, rounds that payment to the nearest cent, and then estimates total interest from the rounded payment:

• Monthly payment: M = round[P × r ÷ (1 − (1 + r)⁻ⁿ), 2]
• Total interest: I = M × n − P

P is the amount refinanced in dollars, APR is the annual percentage rate entered as a percent, r is the monthly rate (APR ÷ 1,200), n is the number of monthly payments (years × 12), M is the monthly payment in dollars, and I is the estimated interest in dollars over the full term. Total interest is calculated using the rounded monthly payment. The formula assumes equal monthly payments and a fixed rate.

Worked Example

Using the calculator’s default values—$20,000, an 8% APR, and a five-year term:

1. Convert the APR to a monthly rate: 8 ÷ 1,200 = 0.0066667.
2. Convert the term to payments: 5 × 12 = 60 months.
3. Apply the payment formula: $20,000 × 0.0066667 ÷ [1 − (1.0066667)⁻⁶⁰] = about $405.53 per month after rounding to cents.
4. Estimate total interest: $405.53 × 60 − $20,000 = $4,331.80.

With these assumptions, the estimated payment is $405.53 per month, and estimated total interest is $4,331.80. Small differences can occur if a lender uses different payment dates, rounding, or interest calculations.

Assumptions

• The APR and monthly payment remain fixed for the entire term.
• Payments are equal monthly payments made on schedule; the formula does not model a particular first-payment date.
• Interest compounds monthly at APR ÷ 12.
• Fees, taxes, insurance, add-on products, and any other charges are not included. Add financed fees to the loan amount only if the lender’s disclosed amount financed includes them.

How to Use a Refinance Calculator

For the loan amount, use the payoff amount that would be refinanced, not necessarily the original amount borrowed or the car’s value. A current payoff quote may differ from the balance shown on a statement because interest can accrue between the statement date and the payoff date. If fees are rolled into the new loan, use the amount that includes them when estimating payments, and keep track of those charges separately when comparing costs.

Enter the new APR and term as quoted for the proposed loan. The calculator returns the scheduled payment and total interest over that full term. To compare it with the existing loan, gather the current payoff figure, current payment, remaining term, and any costs of changing loans. Compare the remaining cost of the current loan with the new loan’s scheduled payments plus any costs not already included in the amount financed. Avoid comparing only monthly payments: a lower payment can result from stretching repayment over more months, which may increase total interest.

What the Results Can—and Cannot—Show

The payment is a mathematical estimate, not a quote, approval decision, or prediction of the amount a lender will offer. The APR, amount financed, term, payment dates, and charges used in the actual contract determine the actual schedule. Get the specific figures from the lender’s written disclosure and use them as calculator inputs when available.

Total interest is not the same as total loan cost if fees or other charges apply. This calculator also does not determine whether a vehicle qualifies, whether a lender will approve an application, or what APR may be offered. It does not account for a changing rate, skipped or late payments, extra payments, a balloon payment, or a payoff before the end of the term. Those situations require a schedule or calculation that includes the relevant details.

Common Comparison Mistakes

• Using the car’s value instead of the payoff: The refinance amount is based on the debt being replaced and any charges financed, not simply the vehicle’s market value.
• Looking only at the monthly payment: Include the number of payments and total interest. A longer term can reduce the payment while extending repayment.
• Ignoring fees: A fee paid upfront affects the total cost even if it does not change the monthly payment. A fee added to the balance increases the amount on which interest is calculated.
• Mixing APR and monthly rates: Enter an annual APR such as 8, not 0.08 or a monthly rate. The formula converts APR to a monthly decimal rate.
• Assuming a rounded estimate is exact: The result is rounded to cents and uses simplified timing assumptions. The contract’s payment schedule may differ slightly.

Frequently Asked Questions

What information do I need for an auto refinance calculator?
Use the amount to be refinanced, the proposed annual APR, and the new loan term in years. For a meaningful comparison, also check the current payoff amount, remaining payments, and any fees.

Does refinancing lower the total interest?
It depends on the amount, APR, term, fees, and payments remaining on the current loan. A lower monthly payment alone does not show whether total interest or overall cost is lower.

Should I enter my current balance or payoff amount?
Use the amount the new loan would actually repay. A dated payoff quote is generally more relevant than an older statement balance; ask the lender or current loan servicer for the figure applicable to the intended payoff date.

Does this calculator include refinance fees?
No. It excludes fees unless they are included in the loan amount you enter. Fees paid separately should be considered separately when comparing the total costs.

Why can a longer term lower the payment but increase interest?
Spreading repayment across more monthly payments can reduce each payment, but interest accrues over a longer period. The calculator shows the payment and estimated interest for the entered term.

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

Related

• Loan Balance Over Time Calculator and Amortization
• Loan Balance: Principal or Principle?
• Loan Balance Graph Equation Over Time

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 | $ | round(p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)), 2) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2