Refinance Payment Formula:
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Car loan refinancing involves replacing your current auto loan with a new one, typically to secure a lower interest rate or better terms. This calculator helps you estimate your new monthly payment after refinancing.
The calculator uses the standard loan payment formula:
Where:
Explanation: The formula calculates the fixed payment needed to fully amortize the loan over the specified term.
Details: Understanding your potential new payment helps determine if refinancing makes financial sense, considering any fees and the remaining loan term.
Tips: Enter your current remaining loan balance, the new annual interest rate (as a percentage), and the new loan term in months. All values must be positive numbers.
Q1: When should I consider refinancing my car loan?
A: Consider refinancing when interest rates have dropped significantly since you got your original loan, or if your credit score has improved.
Q2: Are there fees for refinancing?
A: Yes, there may be application fees, title transfer fees, or prepayment penalties on your current loan. Factor these into your decision.
Q3: Can I refinance with negative equity?
A: It's more difficult but possible with some lenders. You may need to roll the negative equity into the new loan.
Q4: How does refinancing affect my credit score?
A: Applying will cause a small, temporary dip in your score, but timely payments on the new loan will help rebuild it.
Q5: Should I extend my loan term when refinancing?
A: Extending the term lowers payments but increases total interest paid. Shorter terms save money overall but have higher payments.