Auto Loan Refinance Calculator: Payment and Interest

An auto loan refinance calculator estimates a new monthly payment and total interest from the balance you plan to refinance, the new APR, and the new loan term. Enter the lender’s quoted figures to compare the estimate with your current loan; the result does not predict approval or include fees unless you add them to the loan amount.

Formula

The calculator uses the standard fixed-rate, level-payment loan formula. It first finds the monthly payment, rounded to the nearest cent, then subtracts the principal from all scheduled payments to estimate total interest.

• Monthly payment: M = round[P × r ÷ (1 − (1 + r)⁻ⁿ), 2]
• Total interest: I = M × n − P
• Monthly rate: r = APR ÷ 1,200
• Number of payments: n = years × 12

P is the amount refinanced in dollars, APR is the annual percentage rate entered as a percentage, r is the monthly rate as a decimal, n is the number of monthly payments, M is the estimated monthly payment in dollars, and I is estimated total interest in dollars. For example, an APR of 8% becomes a monthly rate of 0.08 ÷ 12. The APR should come from a lender’s quote, not a general market estimate.

Worked Example

Using the calculator’s default inputs—$20,000, an 8% APR, and a five-year term—there are 5 × 12 = 60 monthly payments. The monthly rate is 8 ÷ 1,200 = 0.0066667.

1. Payment before rounding: $20,000 × 0.0066667 ÷ [1 − (1 + 0.0066667)⁻⁶⁰] ≈ $405.53.
2. Monthly payment rounded to cents: $405.53.
3. Total of scheduled payments: $405.53 × 60 = $24,331.80.
4. Estimated total interest: $24,331.80 − $20,000 = $4,331.80.

The displayed interest uses the rounded monthly payment multiplied by the full term, as specified in the calculator. A lender’s amortization schedule can differ slightly because of payment dates, daily interest calculations, or rounding practices.

Assumptions

• The APR and payment amount stay fixed for the full term.
• Payments are equal, made monthly, and start on schedule.
• Interest is compounded monthly at APR ÷ 12.
• The calculation excludes application or title fees, taxes, insurance, add-on products, and any other amount not included in the loan amount.

How to Use a Refinance Estimate

Refinancing replaces an existing auto loan with a new loan. To make the estimate relevant, the loan amount should reflect the payoff amount the lender would need to clear the current loan, rather than the car’s original purchase price or the amount borrowed months or years ago. The payoff figure can change with accrued interest and payment timing, so request a current amount from the existing loan servicer.

Enter the proposed new APR and term from a written quote or other lender disclosure. A longer term can reduce the scheduled monthly payment while increasing the number of payments; it may therefore increase the total interest, depending on the balance and APR. A lower payment by itself does not show whether the total amount paid will be lower. Compare the current loan and proposed loan over the period each would actually remain outstanding, and account for any costs financed into the new balance.

The calculator is useful for estimating payment arithmetic, not for determining whether a lender will approve an application or what terms a borrower will receive. If a quoted rate is variable, includes special conditions, or is expressed differently from an APR, this fixed-rate estimate may not represent the contract.

What the Results Do and Do Not Show

The payment result is the scheduled principal-and-interest installment under the entered assumptions. The total-interest result is the sum of those rounded installments minus the starting loan amount. It is not the amount of interest that will necessarily appear on a statement: actual balances depend on payment dates, the lender’s calculation method, and whether payments are late, early, or extra.

Fees matter when comparing a refinance with keeping an existing loan. If a fee is paid in cash, it is an additional cost but does not increase the modeled principal. If it is added to the new loan, include it in the loan amount to estimate the payment and interest on that larger balance. The calculator does not separately calculate fees, a payoff quote, or savings versus the current loan.

For a like-for-like comparison, gather the current payoff amount, current payment, remaining term, and any stated costs, along with the proposed refinance amount, APR, term, and fees. Compare total remaining payments and costs—not just the monthly installments. A term that extends past the point at which the current loan would be paid off changes the comparison period.

Common Calculation Limits

• Using the original loan balance: The refinance principal is generally based on the current payoff, not the original amount borrowed.
• Leaving out financed costs: Costs added to the new balance increase the principal used in the payment formula.
• Confusing APR and monthly rate: Enter annual APR as a percentage, such as 8, not as 0.08 or as the monthly rate.
• Rounding too early: The payment is rounded to cents; manually rounded intermediate figures can create small differences.

The formula assumes a conventional fixed-rate installment loan with equal monthly payments. It does not model a balloon payment, skipped payments, a changing interest rate, a different payment frequency, or a loan with irregular charges. The term input is limited to 0.0833–50 years and the APR to 0.01%–100% to keep the calculation within its stated input range.

Frequently Asked Questions

What is an auto loan refinance rate?
A refinance rate is the interest rate offered for a new auto loan that pays off an existing one. The rate available to an individual depends on the actual offer and its terms; use the quoted APR as the calculator input.

Does refinancing lower the monthly payment?
It can change the payment, but the result depends on the new balance, APR, and repayment term. A longer term can lower the scheduled installment while extending repayment and changing total interest.

Should I use my car’s value or my payoff amount?
Use the amount that would be refinanced, commonly based on a current payoff quote, not the vehicle’s estimated value. A vehicle’s value is not the amount owed on the loan.

Does this calculator include refinance fees?
No. Add any costs financed into the new loan to the loan amount. Costs paid separately are not included in either displayed result.

Why might my lender’s payment differ?
The lender may use a different payment date, rounding convention, day-count method, financed amount, or contract term. The lender’s disclosure and payment schedule provide the exact figures.

This calculator is educational estimate arithmetic, not financial advice; 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 | $ | round(p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)), 2) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2