Compare your current auto loan to a new rate and term to see how much you could save each month and over the life of the loan.
When Refinancing Your Car Loan Makes Sense
Refinancing replaces your current auto loan with a new one — ideally at a lower APR. If your credit has improved since you bought the car, or rates have fallen, a refinance can lower your monthly payment, cut your total interest, or both. This calculator compares your current loan to a new one side by side.
Rate vs. Term
A lower APR always saves interest. But if you also extend the term to shrink the payment, you can end up paying more interest overall even at a better rate. Keep the term the same or shorter to capture the full savings — the chart shows total interest for each scenario.
Watch Out For
Check for prepayment penalties on your current loan and any fees on the new one. Also avoid refinancing if you're close to paying the car off, since most interest is paid early in a loan and there's little left to save.
Tip: Refinancing usually doesn't require a down payment. Shop a few lenders — credit unions often have the lowest auto refinance rates.
Frequently Asked Questions
When should I refinance my car loan?
Refinancing makes sense when you can get a meaningfully lower APR — often because your credit improved or rates dropped — and you're not near the end of the loan. Enter both loans above to see your monthly and total savings.
Does refinancing a car hurt my credit?
Applying triggers a hard inquiry that may dip your score a few points temporarily. The long-term effect is usually neutral to positive if the new loan lowers your payment and you pay on time.
Can I refinance if I owe more than the car is worth?
It's harder. Lenders prefer loans at or below the car's value. If you're underwater, you may need a shorter term, a co-signer, or to wait until you've paid the balance down.
Will refinancing lower my monthly payment?
It can, either through a lower APR or a longer term. A longer term lowers the payment but can raise total interest, so watch the total-savings figure, not just the monthly number.
Are there fees to refinance a car?
Some states charge a small title or registration fee, and a few lenders add costs. There's usually no down payment. Factor any fees against the savings the calculator shows.