1. What is Car Refinancing?

Car refinancing involves replacing your current auto loan with a new loan, typically with better terms. This calculator helps you estimate potential savings from refinancing your vehicle.

2. How Does Refinancing Work?

The refinancing process involves:

Where:

• Old Total Payments — Remaining payments on current loan
• New Total Payments — Projected payments with new loan

Explanation: The equation calculates the difference between what you would pay with your current loan versus what you would pay with a new loan.

3. Understanding Refinance Savings

Details: Savings come from lower interest rates, shorter loan terms, or both. Even small rate reductions can lead to significant savings over the life of the loan.

4. Using the Calculator

Tips: Enter your current remaining loan payments and the projected payments with the new loan. The calculator will show your potential savings.

5. Frequently Asked Questions (FAQ)

Q1: When should I consider refinancing my car loan?
A: Consider refinancing when interest rates have dropped significantly since you got your original loan or if your credit score has improved.

Q2: Are there fees associated with refinancing?
A: Yes, there may be origination fees, title transfer fees, or prepayment penalties on your current loan that should be factored into your savings calculation.

Q3: Can I refinance if my car is older?
A: Most lenders have age and mileage restrictions, typically requiring the car to be less than 10 years old with under 100,000 miles.

Q4: Will refinancing affect my credit score?
A: The credit inquiry may cause a small, temporary dip in your score, but the long-term benefits of lower payments usually outweigh this.

Q5: How often can I refinance my car?
A: There's no legal limit, but most lenders require you to wait at least 6-12 months between refinancing.