Auto Loan Refinance Interest Rates and Payment Calculator

Auto loan refinance interest rates are the annual percentage rate (APR) offered for a replacement loan; the rate you receive depends on the lender’s offer and your circumstances, so there is no single rate that applies to everyone. Use this calculator to estimate a refinance loan’s monthly payment and total interest: enter the amount refinanced, quoted APR, and term, then compare the estimate with the loan disclosure.

Formula

The calculator applies the standard fixed-rate, level-payment loan formula. It converts APR to a monthly rate, calculates the payment that amortizes the loan over the selected number of months, rounds that payment to cents, and estimates total interest using the rounded payment.

• p = amount refinanced, in dollars.
• apr = annual percentage rate, entered as a percentage (for example, 8 means 8% per year).
• r = monthly interest rate = apr / 1200, as a decimal.
• n = number of monthly payments = years × 12.
• pmt = monthly payment in dollars = p × r / [1 − (1 + r)⁻ⁿ], rounded to the nearest cent.
• int = estimated total interest in dollars = pmt × n − p.

The calculator’s first result is the monthly payment. The second is total interest over the modeled term; it does not include fees or other charges. Its total-interest calculation uses the cent-rounded payment, so small differences from a lender’s final schedule can arise from payment dates, rounding conventions, or adjustments to the last payment.

Worked Example

Using the default inputs—$20,000, 8% APR, and 5 years—the calculation is:

1. Convert the annual APR to a monthly rate: 8 / 1200 = 0.0066667, or about 0.66667% per month.
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.
4. Calculate interest using the rounded payment: $405.53 × 60 − $20,000 = $4,331.80.

The displayed estimate is therefore a monthly payment of $405.53 and total interest of $4,331.80.

Assumptions

• The APR and payment amount stay fixed for the full term.
• Payments are monthly and made at the end of each modeled period.
• Interest compounds monthly at APR / 12.
• The calculation excludes refinancing fees, taxes, insurance, and other charges. Enter the amount the lender says will be financed; do not assume fees are included unless the quote shows that they are.

What Determines a Refinance Rate?

A refinance rate is an offer tied to a particular borrower, vehicle, loan amount, and repayment term. Lenders assess applications using their own criteria and information. Factors that may be considered include credit history, income and existing obligations, the vehicle’s age and condition, its value, the amount owed, and the requested term. The exact factors and their weight vary; this calculator cannot predict an offer or approval.

For a useful estimate, use the APR from a written quote rather than a rate found in a general advertisement or example. APR is intended to express borrowing cost as an annual rate, but the quote’s itemized fees and payment schedule still matter. Confirm whether any charges are paid separately or added to the new balance, and check the amount that will actually be financed.

Compare the Full Cost, Not Just the Payment

A lower monthly payment does not necessarily mean the replacement loan costs less overall. Extending the term spreads repayment over more months and can increase total interest, even when the payment falls. Conversely, a shorter term can raise the monthly payment while reducing the number of interest-bearing months. The comparison depends on the actual balance, APR, fees, and remaining and proposed terms.

For example, a payment can decrease simply because the repayment period gets longer. That change alone does not show that the APR fell or that total cost fell. Compare the current loan’s remaining scheduled payments with the proposed loan’s payments and charges over their respective remaining lifetimes. Use the lender’s payoff amount for the current loan, not just the balance shown on an older statement, because balances and payoff figures can differ by date and accrued interest.

• Ask for the written APR, financed amount, term, payment, and total of payments.
• Identify application, title, processing, or other charges listed in the offer, and whether each is paid upfront or financed.
• Check for any change in payment frequency, due date, or final-payment amount.
• Compare the new schedule with what remains on the current loan, rather than comparing only monthly payments.

Common Issues and Limits

The calculator models a new loan from the amount entered; it does not calculate a vehicle’s payoff amount, account for an existing loan’s remaining schedule, or decide whether a lender will refinance a particular vehicle or balance. Those figures must come from the lender or servicer. If the replacement balance includes fees or other amounts, include them in the loan amount only when the lender confirms they are financed.

Other common sources of mismatch include entering an interest rate rather than APR, typing 0.08 when the input expects 8 for an 8% APR, or entering months where the calculator requests years. The minimum APR is 0.01% because the payment formula divides by the monthly rate. The term accepts years; for example, 48 months is 4 years. Results are mathematical estimates and do not model payment holidays, variable rates, late payments, extra principal payments, or changes in loan terms.

Frequently Asked Questions

What is an auto loan refinance interest rate?
It is the APR on a new loan used to replace an existing auto loan. The offered APR is specific to the application and loan details; obtain the actual figure from the lender.

Does refinancing always lower the monthly payment?
No. The payment depends on the new principal, APR, and term. A longer term can lower the monthly amount while increasing the total interest estimate.

How do I compare refinance offers?
Compare the written APR, financed amount, term, payment schedule, fees, and total payments. Also compare the offer with the remaining payments and payoff information for the current loan.

Should I include refinance fees in the loan amount?
Include them only if the lender says they will be financed. If they are paid separately, keep them separate when comparing overall costs; this calculator does not add fees automatically.

Why is my lender’s payment different from this estimate?
The lender may use a different financed balance, exact payment dates, fees, rounding rules, or a final adjusted payment. Use the figures and schedule in the lender’s disclosure for the exact terms.

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

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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