1. What is Auto Loan Refinance?

Auto loan refinancing involves replacing your current auto loan with a new one, typically with better terms such as a lower interest rate or different loan duration. This calculator helps you understand the total interest impact of refinancing.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( n \) — Number of remaining payment periods
• \( \text{new\_PMT} \) — New monthly payment amount after refinancing
• \( \text{remaining\_P} \) — Remaining principal balance on current loan

Explanation: This calculation shows the total interest you'll pay over the life of the refinanced loan compared to your current remaining principal.

3. Importance of Refinance Calculation

Details: Understanding the total interest impact helps determine if refinancing will actually save you money in the long run, considering any fees associated with refinancing.

4. Using the Calculator

Tips: Enter the number of months remaining on your new loan, your new monthly payment amount, and your current remaining principal balance. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: When should I consider refinancing my auto loan?
A: Consider refinancing when interest rates have dropped significantly since you took out your original loan, or if your credit score has improved.

Q2: Does this calculator account for refinancing fees?
A: No, this calculates only the interest difference. Be sure to factor in any refinancing fees when making your decision.

Q3: How accurate is this calculation?
A: This provides a basic estimate. For precise figures, consult with your lender about exact terms and fees.

Q4: Can I refinance if my car is older?
A: Many lenders have age/mileage restrictions (typically 10 years/100,000 miles), but policies vary.

Q5: Will refinancing affect my credit score?
A: The credit inquiry may cause a small, temporary dip, but responsible payment on the new loan can help rebuild it.