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Auto Loan Refinance Savings Calculator

Auto Loan Refinance Savings Formula:

\[ Savings = (PMT_{old} \times n_{old} - PMT_{new} \times n_{new}) \]

USD
months
USD
months

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1. What is Auto Loan Refinance Savings?

Auto loan refinance savings represents the total amount you would save by switching from your current auto loan to a new one with different terms. It compares the total payments of your original loan versus the proposed new loan.

2. How Does the Calculator Work?

The calculator uses the auto loan refinance savings formula:

\[ Savings = (PMT_{old} \times n_{old} - PMT_{new} \times n_{new}) \]

Where:

Explanation: The formula calculates the difference between what you would pay in total under your current loan versus what you would pay under the new loan terms.

3. Importance of Refinance Savings Calculation

Details: Calculating potential savings helps determine if refinancing makes financial sense. It accounts for both payment amount changes and any extension or reduction of the loan term.

4. Using the Calculator

Tips: Enter your current monthly payment and remaining term, then enter the proposed new payment and term. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this account for refinancing fees?
A: No, this calculates gross savings. Subtract any refinancing fees from the result for net savings.

Q2: What if I extend my loan term?
A: The calculator will show if you're saving money overall, even if paying for longer. A negative result means you'd pay more total.

Q3: Should I always choose the option with highest savings?
A: Not necessarily. Consider cash flow needs and how long you plan to keep the vehicle.

Q4: Does this work for lease buyouts?
A: Yes, if you're refinancing a lease buyout, you can compare the buyout terms to new loan terms.

Q5: How accurate is this calculation?
A: It's mathematically precise for the inputs provided, but doesn't account for early payoff or other variables.

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