When should I refinance my car loan?

Consider refinancing if: rates have dropped 1%+, your credit has improved, you got a high rate from a dealer, or you're more than 12 months into the loan.

Will refinancing hurt my credit score?

There may be a small temporary dip from the credit inquiry and new account. But if you reduce your rate and don't extend the term, it's usually beneficial overall.

Can I refinance if I owe more than the car is worth?

It's harder because the car is security. Some lenders will do it if you have good credit. You may need to bring extra collateral or pay down the balance first.

Car Loan Refinance Calculator

Calculator

Calculate savings from refinancing your car loan to a better rate

Free to useNo data storedAI insightsUpdated: February 2026

Stuck with a high-rate car loan? Rates may have dropped, or your credit may have improved. This calculator shows if refinancing makes sense after accounting for fees.

Enter Your Details

Real-World Examples

Rate Drop Refinance

$22,000 balance at 11%, 36 months left. New offer: 7.5% for 36 months. $400 total fees.

Inputs Used:

balance:22,000currentRate:11newRate:7.5fees:400

Current path: $720/month, $3,920 interest. Refinance: $685/month, $2,660 interest. Save $860 after fees!

Frequently Asked Questions

Glossary

Refinancing

Taking a new loan to pay off an existing loan, usually to get better terms.

Exit Fee

Penalty charged by some lenders for paying off a loan early.

Break-Even Point

How long until savings from the new rate exceed refinancing costs.

Related Tools

Early Payout Calculator

Pay off instead of refinance

Loan Comparison Calculator

Compare refinance offers

Car Loan Calculator

Calculate new loan terms

How to Use

1Enter your current loan balance
2Add your current rate and monthly payment
3Input the remaining months on your loan
4Enter the new rate you've been offered
5Include any exit and setup fees

Key Information

Refinancing makes sense if you can save more than the fees
A 1-2% rate reduction can save hundreds to thousands
Check for exit fees on your current loan first
Your credit score may have improved since original loan

Pro Tips

Wait until you've had the loan 12+ months to refinance
Shop around - banks, credit unions, online lenders
Negotiate with the current lender first - they may match
Don't extend the term too much - lower payment but more interest

Avoid These Mistakes

Not factoring in fees when calculating savings
Extending term significantly (lowers payment but costs more)
Refinancing a small balance where fees exceed savings
Not checking if current loan has hefty exit fees

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026