See How Much Auto Loan Refinancing Could Save You
Auto loan refinancing is the process of replacing your car, truck, or motorcycle loan with a new one of better terms for you. Refinancing your vehicle may help you lower your monthly payment, decrease your total finance charges that you pay over the life of your loan, or remove someone from your loan.
Use this auto loan refinancing calculator to see how much you could potentially save with auto refinancing. Simply plug in the details of your current auto loan and a replacement loan in the first box and press “Calculate.” Try multiple interest rates (APRs) and term lengths in the “New Loan” section to see how different replacement loans may benefit you.
Auto Loan Refinance Calculator:
* Your actual APR will be subject to terms and conditions and will be based upon factors like your income, your vehicle’s loan-to-value ratio, your credit score, and other items. Contact IFS for additional details.
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Interpreting the Calculator Results
This calculator shows you the effect that refinancing your auto loan may have on your finances. To compare your current auto loan with a new one, it simply needs the details of your current auto loan and a new loan’s interest rate and term length. The calculator does not need the loan amount of the replacement loan. It calculates how much of your original loan is remaining at the time of refinancing when you supply the “Months You’ve Held the Loan” in the Original Loan section.
Note: the reason you only need to provide the monthly payment or the interest rate and not both in the Original Loan section is that by providing one along with the loan amount and term length, the calculator can easily produce the other.
Monthly Payment Comparison
The comparison of monthly payments is fairly straightforward. By replacing your current auto loan with a new one of a lower interest and/or term length, refinancing can usually provide monthly payment relief.
Finance Charge Comparison
You should also consider how refinancing may affect the finance charges you pay to buy your car. For vehicle loans, finance charges reflect your total cost of borrowing over the life of your loan. They include both the interest you pay on the amount you borrow and the cost of any prepaid finance charges. When an interest rate reflects your total cost of borrowing (both interest and prepaid finance charges), it is known as an Annual Percentage Rate, or APR. So, where this calculator says “Interest Rate,” it is referring to an APR. Learn more about APRs vs. Note Rates for auto loans.
When people refinance their auto loans, they often seek to lower both their monthly payments and their total finance charges. Usually, when you lower your interest rate enough, getting both results is not hard. However, sometimes when you increase your loan term length significantly over the number of months you have remaining on your original loan, your total finance charges can actually increase. Still, in many cases, it may be possible to lower your finance charges while increasing your loan term if you refinance to a low enough interest rate. Also, increasing your term length can dramatically lower your monthly payments, which is why many people chose to increase their loan terms when refinancing. Learn more about finance charges and how auto loan interest works.
Refinancing to Remove Someone from Your Loan
Vehicle loan refinancing is not always about saving money. Another common reason for refinancing is to remove a co-signer from a loan. However, even if you apply to refinance to remove someone from your loan, you may as well see how much you could save on your monthly payments and finance charge.
Want to Learn More About Auto Loan Refinancing?
We have all the resources you need to learn how auto refinancing works, when may be a good time for you to refinance, and even how the refinancing calculators like the one above work. Visit the pages below to get started!
More About Refinancing
From our Blog: Does Refinancing a Car Hurt Your Credit?
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