Page published October 27, 2026
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Cost examples updated November 6, 2026
Go ahead, play with it. Change any number and watch the total move.
Refinance calculator: old loan vs new loan
Enter what is left on the old loan and the terms of the new loan. The calculator works out the new payment, the monthly saving, the interest left on each loan, the total saved after fees, and how many months it takes for the saving to cover the fees. Borrowers who refinanced saved $84 a month on average in Q4 2025, according to Experian, and LendingTree puts the average refinance APR at 8.05% in Q2 2026 (8.49% in Q3 2026). Those are national averages, not quotes, so replace the rate with a real offer when you have one. For what each credit tier pays on average, see what your credit score costs on a car loan.
APR is the yearly interest rate on the loan, in percent, the price of borrowing, before fees.
How to read it: refinancing saves money when the total saved after fees is above $0. A lower monthly payment alone does not mean a saving. A longer term can add the saving back in interest.
Stretching the term can lower the monthly payment while raising total interest. The payment alone does not say whether a refinance saves money. Compare the interest left on each loan and the total saved after fees.
Where the numbers come from: Current APR: Experian, Q2 2026, average 11.19% used, 6.35% new · New APR: LendingTree, average refinance APR 8.05%, Q2 2026.
Calculation transparency
Jurisdiction. United States. Sales tax, titling, registration and insurance rules are set by your state, so your exact numbers depend on where you buy and register the car.
Rules and time period. Both loans are worked from the same remaining balance, because refinancing replaces the old loan with a new one on what is left. Rates are Experian Q2 2026 averages unless a real offer replaces them. The refinance saving benchmark is Experian Q4 2025, and the average refinance APR benchmark is LendingTree Q2 2026.
Scope and limitations. Educational estimate only. Fees are entered as one number; the calculator does not split them into title, origination, or other charges. Your lender's rate, term, and fees are the binding numbers. Get a real offer for the same balance and term before you decide.
Source links checked November 6, 2026. Figures: Experian State of the Automotive Finance Market (Q2 2026 and Q4 2025); LendingTree average auto refinance rates (Q2 2026 and Q3 2026); Federal Reserve (FRED), motor vehicle loans owned and securitized (June 2026).
Primary sources: Experian, average car payment and loan rates; Experian, used car loan rates by credit score; Experian, when to refinance a car loan; LendingTree, best auto refinance lenders; CFPB, auto-loan shopping guidance; Regulation Z, 12 CFR Part 1026. How the numbers are calculated is written down on the methodology page, and every source is listed on the sources page.
A $142 a month average payment cut for refinancers is quoted in some guides, but it could not be traced to a LendingTree publication, so this page does not use it.
How to use
- Enter the balance left on the old loan. Take it from the latest loan statement, not the original amount borrowed.
- Enter the current APR and the months left. Both come from the old loan as it stands now.
- Enter the new APR. Use a real refinance offer when you have one, or start with the LendingTree average refinance APR of 8.05% from Q2 2026.
- Pick the new term and enter any refinance fees. Title and origination fees go in as one number.
- Read the new payment, the monthly saving, the interest on each loan, the total saved after fees, and the breakeven months. Then try a longer term and watch what happens to total interest.
Formula
Monthly payment equals the balance times the monthly rate times one plus the monthly rate raised to the number of months, all divided by one plus the monthly rate raised to the number of months, minus one. The monthly rate is the APR divided by 12. A loan with no interest would simply divide the balance by the months.
Interest left on a loan equals the monthly payment times the number of months minus the balance.
Monthly saving equals the old payment minus the new payment.
Total saved equals the interest left on the old loan minus the interest on the new loan minus the refinance fees. When that number is below zero, the refinance costs more overall.
Breakeven months equals the refinance fees divided by the monthly saving. With no fees there is nothing to recover. When the new payment is not lower, there is no breakeven point.
The comparison uses the same balance for both loans, because refinancing replaces the old loan with a new one on what is left, not on the original amount.
Definitions
Refinance. Replacing the old loan with a new one on the balance left.
Remaining balance. What is still owed on the old loan, from the latest statement.
APR. Annual percentage rate, the yearly cost of borrowing before fees. Experian's Q2 2026 averages are 6.35% on a new car and 11.19% on a used car.
Months remaining. The months left on the old loan if nothing changes.
Refinance fees. Title, origination, and other charges on the new loan, entered here as one number and subtracted from the saving.
Breakeven months. The months of monthly saving it takes to cover the refinance fees.
Credit tier. The band a credit score falls in. Experian's Q2 2026 averages run from 4.41% for super prime borrowers on a new car to 16.11% for deep subprime, and from 6.29% to 21.62% on a used car.
Total interest. The monthly payment times the number of months minus the balance.
Refinancing replaces the old loan with a new one on what is left, not on the original amount. That is why this page works from a remaining balance, not a purchase price, and why it is a different decision from paying cash or financing at purchase.
Worked example: $15,000 left, 36 months to go
| Version | Rate | Term left | Monthly payment | Interest left to pay |
|---|---|---|---|---|
| Stay on the old loan | 11% | 36 months | $491 | $2,679 |
| Refinance, same term | 6.5% | 36 months | $460 | $1,550 |
| Refinance, term restarted | 6.5% | 60 months | $293 | $2,610 |
Staying put means $491.08 a month and $2,679 in remaining interest, shown rounded. Refinancing at 6.5% over the same 36 months means $459.74 a month and $1,550 in interest, a saving of $1,128 and a payment lower by about $31. Refinancing at 6.5% over a restarted 60 months means $293.49 a month, which feels like a win of about $198 a month, but total interest is $2,610, a saving of only $69, and the household pays for 24 months longer. The lower payment is real, and the saving is almost not.
Worked example: $18,000 left, 42 months to go
| Version | Rate | Term left | Monthly payment | Interest left to pay |
|---|---|---|---|---|
| Stay on the old loan | 10.5% | 42 months | $514 | $3,587 |
| Refinance, same term | 6.5% | 42 months | $480 | $2,174 |
| Refinance, term restarted | 6.5% | 60 months | $352 | $3,131 |
Staying put means $513.99 a month and $3,587 in remaining interest, shown rounded. Refinancing at 6.5% over the same 42 months means $480.32 a month and $2,174 in interest, a saving of $1,414 in interest and $1,214 after $200 of fees, with a payment lower by about $34 a month. The fees are covered after about 6 months of that saving. Refinancing at 6.5% over a restarted 60 months means $352.19 a month, a payment lower by about $162 a month, but total interest is $3,131, a saving of only $456 in interest and $256 after the same $200 of fees, and the household pays for 18 months longer.
Verdict in numbers: the same-term refinance leaves $1,214 after fees; the restarted term leaves $256 after fees. The restarted term cuts the payment by about $128 a month more than the same-term refinance, and gives back $958 of the saving to do it.
Average rates by credit tier
The rate a refinance offer carries depends heavily on the credit tier. Experian's Q2 2026 averages, by VantageScore 4.0 tier:
| Credit tier | Score range | New car APR | Used car APR |
|---|---|---|---|
| Super prime | 781-850 | 4.41% | 6.29% |
| Prime | 661-780 | 6.15% | 8.81% |
| Near prime | 601-660 | 9.71% | 13.93% |
| Subprime | 501-600 | 13.52% | 19.10% |
| Deep subprime | 300-500 | 16.11% | 21.62% |
| All borrowers | All scores | 6.35% | 11.19% |
Source: Experian, State of the Automotive Finance Market, Q2 2026. Averages across all loans in each tier, not quotes. Your rate depends on the lender, the car, and your full credit picture.
The reset term warning, stated plainly
A lower payment on a longer term can cost more than the old loan, not just save less. That happens when the extra months of interest outweigh the lower rate, which is most likely when the balance is large, the rate cut is small, or the new term is much longer than the time left. Always compare total interest left, not the monthly payment, and always ask the lender for the term in months, the payment, and the total of payments before signing. Fees belong in the same comparison: an origination fee or title fee on the new loan comes straight off the saving, so a $1,128 saving with $300 of fees is a $828 saving.
When refinancing is most likely to pay
When the credit score has improved since the original loan, since the rate gap is then real rather than hoped for: see what your credit score costs on a car loan for the tier gaps in dollars. When the remaining term is long enough for the rate cut to work, since a loan with six months left has little interest left to save at any rate. And when the household can keep the same term or shorten it, since that locks the saving in instead of trading it for a lower payment. If the goal is a lower payment because money is tight this month, that is a different decision from saving money, and it should be named as such: breathing room now, paid for over more months.
Figures: Driveonomics amortization arithmetic on a $15,000 remaining balance. Payments and interest rounded to the nearest dollar in the table, exact to cents in the text. No fees are included in the table; subtract any new loan fees from the saving. The $18,000 example on this page uses the same arithmetic, with $200 of fees included in the saving.
Educational estimates only, not financial, tax, legal or insurance advice. Every figure on this page is a typical example worked from the inputs stated on the page, not a quote for a specific car, loan, or driver. Your rate, insurance, fuel use, and resale value will move your total. See Terms.
Questions people actually ask
Should I refinance my car loan?
Refinance when the rate drop survives the term. In the example on this page, a $15,000 balance with 36 months left at 11% carries $2,679 in remaining interest. Refinancing at 6.5% over the same 36 months cuts that to $1,550, a saving of $1,128. Refinancing at 6.5% over a restarted 60 months cuts it only to $2,610, a saving of $69, while adding 24 months of payments.
Can a lower payment cost me more overall?
Yes, when the term gets longer. A lower payment on a longer term can cost more than the old loan, not just save less, when the extra months of interest outweigh the lower rate. Always compare total interest left, not the monthly payment, and ask the lender for the term in months, the payment, and the total of payments before signing.
What is the reset term warning?
It is the warning that restarting the loan clock can erase a rate cut. In the example on this page, the 60 month refinance drops the payment by about $198 a month against the old loan, but saves only $69 in total interest, because the household pays for 24 months longer. The payment win is real and the saving is almost not.
When is refinancing most likely to pay?
When the credit score has improved since the original loan, so the rate gap is real; when the remaining term is long enough for the rate cut to work, since a loan with only a few months left has little interest left to save; and when the household keeps the same term or shortens it, which locks the saving in instead of trading it for a lower payment. Subtract any new loan fees from the saving.
How long until refinancing pays for itself?
Divide the refinance fees by the monthly saving. In the $18,000 example on this page, $200 of fees divided by about $34 a month of saving is about 6 months. With no fees there is nothing to recover, so the saving starts at once. When the new payment is not lower than the old payment, there is no breakeven point, because the monthly saving is zero or less.
Related: See what the new payment would be before you refinance.
Related: Refinancing into a longer term has the same trade-off. See whether an 84-month loan is a good idea.
Related: Paying early is the other way to cut interest. See what paying off your car loan early saves.
Related: Compare refinance offers at myAutoloan Affiliate link: if you apply through it, Driveonomics may earn a commission at no extra cost to you. See our affiliate disclosure.