David is a Chartered Financial Analyst with 15 years of experience in consumer lending and auto finance analysis.
This 4-in-1 Auto Loan Refinance calculator helps you plan your new loan. Enter any three variables—Loan Amount, New Annual Rate, New Loan Term, or New Monthly Payment—to solve for the fourth.
Auto Loan Refinance Calculator
Auto Loan Amortization Formulas
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Solve for Loan Amount (P):
P = M [ (1 + i)^n – 1 ] / [ i(1 + i)^n ]
Solve for Loan Term (n, in months):
n = -ln(1 – (P*i / M)) / ln(1 + i)
Solve for Rate (i):
*Solved iteratively (no direct formula)
Formula Variables
- (P) Loan Amount (Principal): The total amount you are refinancing.
- (R) New Annual Rate: The new annual interest rate for the refinanced loan (e.g., 5.5).
- (T) New Loan Term (Years): The length of the new loan, in years.
- (M) New Monthly Payment: The new monthly principal and interest (P&I) payment.
- (i): Monthly Interest Rate (R / 12 / 100)
- (n): Total Number of Payments (T * 12)
Related Calculators
What is an Auto Loan Refinance?
Auto loan refinancing is the process of replacing your existing car loan with a new one, typically from a new lender. The new loan pays off the old loan’s balance, and you begin making payments to the new lender under different terms.
There are two primary reasons to refinance a car loan. The first and most common is to secure a **lower interest rate**. If interest rates have dropped since you bought your car, or if your credit score has significantly improved, you may qualify for a rate that lowers your monthly payment and saves you money on total interest. The second reason is to **change the loan term**. You might extend the term to get a lower, more affordable monthly payment, or shorten the term to pay the car off faster (though this increases the monthly payment).
This calculator is a 4-in-1 tool designed to help you explore your options. You can solve for any one of the four main variables. For example, enter your loan amount, a target payment, and a desired term to see what interest rate you would need to find.
How to Calculate a Refinance Payment (Example)
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Identify Your New Loan Details
Your remaining loan balance is $25,000 (P). You are approved for a new 5-year (T) loan at a 5.5% (R) annual rate. You want to find your new monthly payment (M).
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Find Monthly Rate (i) and Total Payments (n)
Monthly Rate (i) = 5.5% / 12 / 100 = 0.0045833
Total Payments (n) = 5 Years * 12 Months = 60 -
Apply the Amortization Formula
The formula is: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
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Calculate the Payment
M = $25,000 [ 0.0045833 * (1.0045833)^60 ] / [ (1.0045833)^60 – 1 ]
M = $25,000 [ 0.0045833 * 1.3156 ] / [ 1.3156 – 1 ]
M = $25,000 [ 0.006030 ] / [ 0.3156 ]
M = $25,000 * 0.019106 -
Final Result
Your new monthly payment (M) will be $477.65.
Frequently Asked Questions (FAQ)
The best time is when your credit score has improved significantly (e.g., by 50-100 points) since you first got the loan, or if general interest rates have dropped. Most lenders require you to wait at least 6-12 months after your original purchase.
Can I refinance if I have bad credit?It can be difficult, but not impossible. If your credit is still poor, you are unlikely to get a better interest rate. However, if your goal is to lower your monthly payment by extending the term, you may find a lender willing to do so, but be aware this will likely cost you more in total interest.
Can I get “cash out” when refinancing a car loan?Some lenders offer “cash-out” auto refinancing if your car is worth more than your loan balance (you have equity). You take out a new, larger loan that pays off your old one and gives you the difference in cash. This can be risky, as it increases your debt on a depreciating asset.
What loan term should I get?You can use this calculator to decide. Enter your Loan Amount (P), your New Rate (R), and a Monthly Payment (M) you are comfortable with. Leave the “Loan Term (T)” field blank and click “Calculate.” The result will show you how many years it will take to pay off the loan with that payment.