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Auto Loan Refinance Formula (84 months):
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This calculator helps determine your new monthly payment when refinancing an auto loan to a new interest rate over an 84-month term. It's useful for comparing your current payment with potential refinance options.
The calculator uses the standard loan payment formula:
Where:
Explanation: The formula calculates the fixed monthly payment required to pay off the loan balance over 84 months at the new interest rate.
Details: Calculating your potential new payment helps determine if refinancing could save you money or reduce your monthly payment. It's important to consider both the payment amount and total interest over the loan term.
Tips: Enter your current remaining loan balance and the new annual interest rate (converted to monthly decimal). All values must be valid (balance > 0, rate ≥ 0).
Q1: Why refinance an auto loan?
A: Refinancing can lower your monthly payment, reduce your interest rate, or change your loan term. It may save money if interest rates have dropped since you got your original loan.
Q2: Is an 84-month term a good idea?
A: While 84-month loans have lower payments, you'll pay more interest overall and may be "upside down" on your loan longer. Consider shorter terms if possible.
Q3: How do I convert APR to monthly rate?
A: Divide the annual rate by 12 (for monthly rate) and by 100 (to convert from percentage to decimal). Example: 6% APR = 0.06/12 = 0.005 monthly.
Q4: Are there fees to refinance?
A: Yes, there may be application fees, title transfer fees, or prepayment penalties on your current loan. Factor these into your savings calculation.
Q5: Does refinancing reset the loan term?
A: Yes, refinancing typically starts a new loan term (84 months in this case), which may extend your total repayment period.