Personal Loan Refinance Rate Calculator and Guide

This personal loan refinance calculator estimates the monthly payment and total interest on a replacement loan from its balance, APR, and term. Enter the new loan’s figures to see the scheduled payment and interest; compare them with your existing loan using figures from your lender.

Formula

The calculator uses the standard fixed-payment loan formula. It first finds the monthly payment from the principal, monthly interest rate, and number of payments, rounds that payment to cents, then estimates total interest as the sum of scheduled payments minus the amount borrowed.

• P (p) is the replacement loan principal in dollars.
• APR (apr) is the annual percentage rate entered as a percentage, such as 8 for 8% per year.
• r is the monthly rate, calculated as APR ÷ 1,200.
• y (yrs) is the term in years; n is the number of monthly payments, calculated as y × 12.
• M (pmt) is the monthly payment in dollars, rounded to the nearest cent.
• I (int) is estimated total interest in dollars: M × n − P.

In symbols, M = round(P × r ÷ [1 − (1 + r)−n], 2), and I = M × n − P. The rate must be above zero for this formula. The calculator’s input limits also restrict APR to 100% and the term to 50 years.

Worked Example

Using the default inputs—$20,000 principal, 8% APR, and a five-year term—the monthly rate is 0.08 ÷ 12 = 0.0066667, and the payment count is 5 × 12 = 60.

Substitute these values into the payment formula:

M = round(20,000 × 0.0066667 ÷ [1 − (1.0066667)−60], 2) = $405.53.

Then calculate total interest using the rounded monthly payment: I = $405.53 × 60 − $20,000 = $4,331.80. These are scheduled-payment estimates, not a lender’s payoff quote or offer.

Assumptions

• The interest rate stays fixed for the full term.
• Payments are equal, made monthly, and assumed to occur at the end of each monthly period.
• Interest compounds monthly at APR ÷ 12.
• The calculation excludes origination charges, other fees, taxes, insurance, and any amount added to the loan. Enter a principal that reflects the amount you expect to finance.

What a Refinance Rate Means

Refinancing a personal loan generally means taking out a new loan to pay off an existing one. The replacement loan has its own principal, APR, payment schedule, and term. “Refinance rate” is not one universal rate: a lender quotes terms for a particular application, and the actual offer depends on the lender’s assessment and the details of the transaction. This calculator does not retrieve quotes or estimate what rate a person might receive.

For a useful comparison, gather the current payoff amount, remaining payment count, monthly payment, and any charges for both arrangements. The balance shown on a statement may differ from the amount needed to settle a loan on a particular date. Ask the current lender for a payoff figure and the prospective lender for a complete written disclosure, including the amount financed and payment schedule.

How to Compare the Numbers

A lower monthly payment does not automatically mean a lower overall cost. A longer term can reduce each payment while increasing the total number of months interest accrues. For example, a replacement loan may have a smaller payment because it spreads repayment over more time, even if the new APR is lower. Compare the remaining cost of the existing loan with the full cost of the proposed replacement, rather than looking at the payment alone.

• Use the new loan’s actual proposed principal, APR, and term—not a rate advertised without an application.
• Check whether fees are paid separately or included in the new balance. If financed, they can raise both the principal and interest.
• Compare total scheduled payments and remaining interest, while accounting separately for any charges that the calculator does not include.
• Confirm whether the existing loan has special terms or a payoff process that affects the amount due. The calculator does not model contract-specific conditions.

For instance, if a current loan has 24 monthly payments left, comparing its original term with a new five-year term would be misleading. Compare the remaining 24-payment schedule with all 60 proposed payments, and include any refinancing costs in the assessment. A calculator can organize the arithmetic, but it cannot determine whether a contract permits a particular action or what a lender will approve.

Costs, Limits, and Common Mistakes

The result is an estimate based on a level-payment formula. Real billing can differ because of the lender’s precise day-count method, payment dates, rounding practices, fees, or payoff timing. The total-interest figure assumes every calculated payment is made as scheduled and uses the rounded monthly payment throughout. It does not include a final adjustment that a lender may make to reconcile a remaining balance.

A frequent error is entering “8” as 0.08 in the APR field. The field expects a percentage number: enter 8 for 8%. Another is treating the full original loan amount as the refinance principal when the payoff balance is different, or overlooking charges added to the new loan. Avoid comparing only APRs or only monthly payments; each describes just part of the cost and schedule.

The calculation is not a quote, approval check, credit assessment, or payoff statement. It cannot account for variable-rate changes, irregular payments, extra payments, deferred payments, or lender-specific fees. Obtain real rates, fees, and limits from the lender and verify the proposed terms in its disclosure.

Frequently Asked Questions

What is a personal loan refinance rate?
It is the APR offered for a new loan used to repay an existing personal loan. The offer is specific to the application and loan terms; this calculator lets you enter an APR but does not predict one.

Does refinancing always lower the monthly payment?
No. The payment depends on the replacement balance, APR, and term. A longer term may lower a payment, while a different rate or larger financed balance may raise it.

Can I compare a refinance with my current loan using this calculator?
Yes, as an estimate: calculate the proposed loan using its expected balance, APR, and term, then compare that schedule with the remaining payments on your current loan. Add fees separately because they are not included.

Does a lower APR mean I will pay less overall?
Not necessarily. The loan term, amount financed, fees, and number of payments also affect total outlay. Compare full remaining payment schedules and costs, not APR alone.

Why does my lender’s payment differ from the estimate?
The lender may use different rounding or timing conventions, include fees in the balance, or calculate interest according to the contract and payment dates. Its disclosure and payoff figures provide the transaction-specific amounts.

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

Related

• Refinance Car Loan Prequalification Calculator
• Refinance Car Loan Prequalification Calculator
• Refinance Car Loan Calculator: Compare Payments and Interest

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 | $ | round(p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)), 2) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2