Auto Refinance Calculator

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See how much you could save with our auto refinance calculator

You might be wondering what it takes to refinance a car loan. Calculators like these are a great place to start.

To use our auto loan refinance calculator, you need to:

1. Grab your current auto loan paperwork. Find a recent bill or log into your lender’s customer portal and note your:

Monthly payment amount
Remaining balance
Time left on your loan
Current auto loan annual percentage rate (APR)

2. Get some offers. You can’t be sure you’re not leaving money on the table if you don’t shop around. Get a handful of auto refinance offers so you can compare and find the best deal.

Many banks and credit unions can refinance car loans. Note that some lenders (such as Capital One), won’t refinance their own auto loans, only auto loans from other lenders.

You can also compare offers from up to five lenders at once by using LendingTree’s loan marketplace. It only takes a few minutes and checking rates won’t impact your credit.

See our list of the top auto refinance rates and lenders.

3. Crunch the numbers. Once you know your current auto loan details and what kind of refinance auto loans you could qualify for, it’s time to use our auto refinance calculator. Simply plug each figure into the corresponding box.

What is auto loan refinancing?

Refinancing a car loan is the act of trading your current auto loan for a new one, ideally one with a lower interest rate. You’ll use the refinance loan to pay off your original loan. In its place, you’ll make payments on your refinance loan.

You may be able to refinance and borrow from your vehicle’s equity at the same time. Equity is what you’ve already paid on your car. This is called a cash-out auto refinance. These can be handy in a pinch but can lead to an upside-down car loan.

Refinancing your auto loan can lower your monthly payment in two ways.

First, you might qualify for a lower rate, resulting in a lower bill. You might also be able to choose a longer loan term. This will give you more time to pay what you owe, spreading your balance further (which will usually bring down your payment).

Not all cars can be refinanced

Restrictions vary by lender, but certain cars are not typically approved for refinancing. For instance, you might not be able to refinance if your car has more than 100,000 miles. You probably can’t be behind your existing loan, either.

When is auto loan refinancing a good idea?

When your credit score has improved

Bad credit car loans can come at a cost, but sometimes they’re necessary if you’re in desperate need of transportation. If you’ve improved your credit score since buying your car, you could qualify for a lower APR.

According to Experian’s State of the Automotive Finance Market, the average new car auto loan interest rate for someone with bad credit (501-600) was 13.18% in the second quarter of 2024.

With that in mind, imagine you have $25,000 left on your auto loan. You also have 48 months to go and you’re paying an APR of 13.18%. This leaves you with a monthly payment of about $673. However, you’ve been working on your credit and you now qualify for a 9.83% APR.

If you were to refinance (while keeping a 48-month term) you would save $1,963 in overall interest. Your monthly payment would also go down from $673 to $632.

When rates have dropped since you bought your car

It’s true — interest rates are up across the board. Even so, keep your eye on auto loan refinance rates. If you financed during an inflationary peak and rates drop, that could be an ideal time to refinance.

For context, here are the average APRs for auto refinance loans closed on LendingTree’s marketplace in the fourth quarter of 2023.

Credit Score	Average APR
639 or less	11.39%
640-679	9.92%
680-719	8.84%
720 or higher	7.82%

When you need a lower monthly payment

Extending your loan term when you refinance might get you a lower monthly car payment. That’s because you’ll have more time to spread your loan balance across.

Keep in mind that the longer it takes you to pay off your loan, the more overall interest you may pay. Still, that breathing room could be worth it for some.

When you have dealership financing

Buying a car can be chaotic. Between picking the perfect ride and negotiating car prices, you may not have had time to shop for a loan. Instead, the dealer may have taken care of the financing.

Allowing the dealer to set up your loan can be convenient, but it also comes at a cost. Dealers have no obligation to shop for the best auto loan rates.

And if you’re paying higher interest rates because of in-house financing, consider refinancing your car loan with bad credit.

When you want to add or remove a cosigner

Many auto loan refinance lenders will allow you to add a cosigner to your new loan. Adding a creditworthy cosigner can help lower your interest rates.

If you already have a cosigner but you’d like to remove them, refinancing can help you do that, too. Removing a cosigner will mean that person will no longer be responsible for your loan. On the downside, any positive impact that person had on your rate will no longer apply.

When is auto loan refinancing a bad idea?

If you don’t qualify for a lower rate

Refinancing probably won’t make sense if your credit score hasn’t gone up since you bought your car.

If you don’t have much time left on your loan

If you’re close to paying off your car loan, then refinancing might not be worth it.

Even if you qualify for a lower rate, the difference in overall interest you’ll pay might be negligible. Also consider possible title transfer and registration fees that could come with refinancing.

If you still can’t afford your monthly payment

If you still can’t swing your car note after refinancing, you may need to explore how to get out of your car loan, instead.

How to apply for an auto refinance loan

1. Check your credit score

To decide if refinancing is worth it, you need to know if your credit score has gone up since you bought your car. You can check your credit score for free by using LendingTree Spring.

2. Prequalify for several auto refinance loans

Many auto refinancing companies will let you prequalify. This simple process will help you see how likely it is that a lender will approve you. Prequalification doesn’t impact your credit.

Here, you’ll provide contact information and some basic financial details, such as your income and employment status. Remember, shopping around may help you find the lowest rate. Aim to get three to five offers in hand.

3. Compare your offers

When you have your offers, it’s time to find the one that will give you the best deal. The lower the interest rate or APR, the cheaper the loan. Also, pay attention to loan terms, loan amounts and application fees.

You can usually apply for refinancing online. You may need to provide bank statements and an ID. At this point, the lender will also run a hard credit pull to make its final approval decision.

If the lender approves you, it will provide you with next steps (such as transferring your title).