Personal Loan Refinance Calculator and Cost Guide

This personal loan refinance calculator estimates the monthly payment and total interest on a replacement loan from its amount, APR, and term. Enter the new loan’s figures to see the scheduled payment and interest; the calculation does not decide whether refinancing fits your circumstances.

Formula

The calculator uses the standard fixed-payment loan formula. It first calculates a monthly payment from the loan principal and monthly interest rate, then multiplies that payment by the number of months and subtracts the principal to estimate total interest.

• P is the new loan amount, in dollars.
• APR is the annual percentage rate entered as a percent per year.
• r is the monthly rate, calculated as APR ÷ 1,200.
• n is the loan term in months, calculated as years × 12.
• Payment = P × r ÷ [1 − (1 + r)⁻ⁿ]. The displayed payment is rounded to cents.
• Total interest = displayed monthly payment × n − P.

The total-interest result uses the rounded monthly payment, as a real payment schedule is generally stated in currency units. Actual lender schedules can differ because of payment dates, rounding conventions, fees, and loan-specific terms. At the minimum APR input, the formula remains defined; a zero-interest loan is not accepted by this calculator.

Worked Example

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

Payment = 20,000 × 0.0066667 ÷ [1 − (1 + 0.0066667)⁻⁶⁰] = $405.53 per month, rounded to cents.

Total interest = $405.53 × 60 − $20,000 = $4,331.80. This is the scheduled interest estimate before any refinancing costs or changes to the payment schedule.

Assumptions

• The APR and payment amount stay fixed throughout the term.
• Payments are made monthly, with the first payment one month after the loan begins.
• Interest compounds monthly at APR ÷ 12.
• The calculation excludes origination or other fees, taxes, insurance, and any existing-loan payoff charge. Entering a loan amount that includes financed fees can reflect those fees in the payment, but it will not identify or itemize them.

How Personal Loan Refinancing Works

Refinancing means taking out a new loan to pay off one or more existing personal loans. The new agreement has its own principal, APR, term, payment schedule, and possible charges. A lender’s payoff figure may not equal the balance shown on a recent statement: interest can accrue between the statement date and payoff, and other amounts may apply under the agreement.

For a useful estimate, gather the proposed loan amount, APR, and term from the lender’s disclosure, then compare the calculator’s results with the current loan’s remaining payments and payoff amount. Check whether fees are paid upfront or added to the balance. If they are added, the amount financed may be greater than the amount used to clear the old debt.

Compare Total Cost, Not Just the Payment

A lower monthly payment does not necessarily mean a lower overall cost. A longer term spreads repayment across more months and can increase total interest even when the payment falls. For example, extending repayment can make monthly obligations smaller while keeping the balance outstanding longer. Conversely, a shorter term can produce a higher payment but fewer months of interest. The calculator helps show this trade-off for the new loan, but it does not calculate the existing loan’s remaining interest or include refinancing costs.

To compare the full picture, set out the following separately:

• The current loan’s payoff amount and remaining scheduled payments.
• The replacement loan’s principal, APR, term, monthly payment, and total scheduled payments.
• Any fees, including whether they are paid separately or financed.
• Any differences in payment date, variable-rate terms, prepayment conditions, or other contract features.

Do not treat the calculator’s total interest as the total amount owed: it excludes the principal, and it excludes costs that are not inputs. Total scheduled payments in this simplified model would be the displayed payment multiplied by the number of months.

Common Problems and Limits

A common misconception is that refinancing automatically reduces debt. It replaces the existing debt with a new obligation; whether the cost or repayment timeline changes depends on the new contract and any fees. Consolidating several balances into one payment also does not reduce the combined principal by itself.

• Using the wrong amount: use the proposed new loan principal, not necessarily the old statement balance. Confirm the payoff amount and whether costs are added.
• Confusing APR with a monthly rate: enter APR as an annual percentage, such as 8, not 0.08 or a monthly rate. The formula converts it to a monthly rate.
• Comparing different terms: compare total payments and interest over the full schedule, not only monthly amounts.
• Ignoring rounding and timing: the estimate rounds the payment to cents and assumes regular monthly payments. A lender’s precise schedule may vary.
• Overlooking loan terms: confirm whether the quoted rate is fixed or variable and review fees, payment dates, and payoff conditions in the lender’s documents.

This is a mathematical estimate, not a loan offer, approval prediction, or personalized financial advice. The calculator does not model late payments, extra payments, changing rates, payment holidays, or a detailed payoff schedule. Ask the lender for the actual payoff and written disclosures before relying on a quote.

Frequently Asked Questions

Can I refinance a personal loan?
Some lenders offer new personal loans that can be used to pay off existing debt, but availability and terms depend on the lender and the application. Check the loan documents and payoff process rather than assuming an existing loan can be transferred.

Does refinancing a personal loan lower the monthly payment?
It can result in a lower scheduled payment if the new amount, rate, or term produces one, but this calculator cannot predict a lender’s offer. A longer term may lower the payment while increasing the total interest paid.

Will refinancing save me money?
This calculator alone cannot answer that because it models only the proposed loan and excludes fees and the current loan’s remaining cost. Compare payoff figures, remaining payments, fees, and total costs using the actual lender disclosures.

Can I refinance more than one personal loan into one?
A new loan may be used to pay multiple balances if its terms and permitted use allow it. Include the amounts needed to clear every balance, and account for any fees; combining payments does not itself reduce the debt.

Does the calculator include refinancing fees?
No. It calculates principal-and-interest payments from the amount, APR, and term. If fees are financed, you can include them in the entered loan amount for an estimate, but the result will not show fees separately.

The result is an estimate; 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 | $ | p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2