Cash-Out Auto Refinance: Calculate Your New Loan

A cash-out auto refinance replaces your current car loan with a new loan for more than the amount needed to pay off the old one; the difference, after any fees, is cash you may receive. This calculator estimates the new monthly payment and total interest when you enter the new loan amount, APR, and term.

Formula

The calculator uses the standard fixed-payment loan formula. It estimates the payment on the replacement loan; it does not determine how much cash a lender will release or whether a borrower qualifies.

• 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 new loan principal in dollars, APR is the annual percentage rate entered as a percent, r is the monthly rate as a decimal, n is the number of monthly payments, M is the monthly payment in dollars, and I is estimated total interest in dollars. The payment is rounded to cents before total interest is calculated.

Worked Example

Using the calculator’s default inputs—$20,000 principal, 8% APR, and five years:

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] = $405.53 per month, rounded to cents.
4. Calculate total interest using the rounded payment: ($405.53 × 60) − $20,000 = $4,331.80.

The estimate is therefore a $405.53 monthly payment and $4,331.80 in total interest over 60 payments, under the assumptions below.

Assumptions

• The interest rate remains fixed for the full term.
• Payments are equal monthly payments, made at the end of each monthly period.
• Interest compounds monthly, using APR divided by 12.
• The calculation excludes lender fees, taxes, insurance, and other charges unless they are included in the loan amount you enter.

How Cash-Out Auto Refinancing Works

In a refinance, a new loan pays off the existing auto loan. With a cash-out version, the new principal is larger than the payoff amount, and the remaining proceeds may be paid to the borrower. The lender’s payoff figure can differ from the balance shown on a recent statement because interest may accrue between dates or the account may include other amounts. Ask for a dated payoff quote when evaluating the numbers.

For example, suppose a lender’s payoff quote is $12,000 and a new loan is $16,000. The gross difference is $4,000 before any fees or other amounts are deducted or added. If $500 in eligible charges is financed, the borrower’s net cash could be lower than $4,000, depending on how the transaction is structured. This calculator estimates payments using the full new principal you enter; it does not calculate net proceeds.

Cash-out refinancing is different from simply changing a loan’s rate or term. A refinance can increase, decrease, or leave the monthly payment similar depending on the principal, APR, and term. A lower payment by itself does not establish that the overall borrowing cost is lower: extending repayment can mean paying interest for longer.

How to Use the Estimate

Enter the amount of the proposed replacement loan, not just the cash you hope to receive. The principal may include the old loan payoff and any additional amount financed. Enter the APR and term shown in a lender’s written offer, rather than assuming that the example defaults reflect available terms. The actual offer and its disclosures are the source for transaction-specific figures.

Compare estimates on consistent terms. If you are assessing a refinance against your current loan, gather the current payoff amount, remaining payment schedule, and any charges that apply to either transaction. The calculator can show a new loan’s estimated payment and interest, but it does not compare the two loans automatically or account for payments already made on the existing loan.

• A longer term can reduce the scheduled monthly payment while increasing the time interest accrues.
• A larger principal generally raises the payment if APR and term are unchanged.
• A higher APR generally raises the payment and total interest if principal and term are unchanged.
• Fees financed into the principal can increase both the payment and interest.

Costs, Limits, and Common Questions

The result is a mathematical estimate, not an offer, approval decision, or cash-out quote. Lenders may use different payoff timing, payment dates, rounding, and fee treatment. The formula assumes equal payments and a fixed rate, so it will not represent a loan whose payment structure or rate changes. It also does not estimate vehicle value, equity, eligibility, or the amount a lender may permit a borrower to receive.

A common misconception is that cash-out proceeds equal the new loan amount minus the original loan balance. The transaction is based on the payoff amount at the time the old loan is settled, and costs or other adjustments may affect the net proceeds. Another misconception is that refinancing necessarily lowers borrowing costs. A smaller monthly payment can result from a longer term even when total interest is higher.

Frequently Asked Questions

What is cash-out auto refinancing?
It is replacing an existing auto loan with a new, larger loan and receiving some of the difference after the old loan is paid off and applicable charges are handled.

How much cash can I get from a car refinance?
The amount depends on the new loan amount, the payoff quote, and how charges are treated. This calculator estimates payments only; obtain the proposed loan and net-proceeds figures directly from the lender.

Does cash-out refinancing increase my car payment?
It can, but not always. The payment depends on the replacement loan’s principal, APR, and term. A longer term may lower the scheduled payment even when the amount borrowed is larger.

Can I refinance for more than I owe on my car?
A cash-out refinance is structured around borrowing more than the existing loan payoff, but whether a lender offers that arrangement and the amount available depend on its terms and assessment. This calculator does not model those decisions.

Does this calculator include refinance fees?
No. It calculates payments and interest from the principal, APR, and term entered. If a fee is included in the proposed loan principal, enter that larger amount; otherwise, consult the lender’s itemized figures.

Is a lower monthly payment proof that refinancing costs less?
No. The term may be longer, so the payment can fall while total interest rises. Compare the remaining cost of the current loan with the complete replacement-loan figures, including applicable charges.

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

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in p | New 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