Auto Loan Refinance Calculator
Calculate if refinancing your auto loan is worth it. See new monthly payment, monthly savings, break-even point, and total interest saved over the life of the loan.
2026 Average Auto Refinance Rates by Credit Score
Use these as a benchmark when shopping for rates
| Credit Score | New Car Rate | Used Car Rate |
|---|---|---|
| 781-850 (Excellent) | 5.99% | 6.49% |
| 661-780 (Good) | 7.49% | 8.99% |
| 601-660 (Fair) | 10.99% | 12.49% |
| 501-600 (Poor) | 14.99% | 16.99% |
| 300-500 (Very Poor) | 18.99% | 20.99% |
Source: Average rates from major auto lenders as of January 2026. Actual rates may vary based on lender, loan amount, and other factors.
- 1Best timing: Wait at least 60-90 days after your original loan before refinancing to allow the loan to season.
- 2Credit check: Many lenders offer rate quotes with a soft credit pull that won not affect your score.
- 3Vehicle age: Most lenders have limits on vehicle age (usually 7-10 years) and mileage (typically under 100,000 miles).
- 4Shop around: Get quotes from at least 3-5 lenders including credit unions, which often have the best rates.
- 5Avoid term extension: While extending your loan term lowers payments, it can increase total interest paid.
Related Calculators
About This Calculator
Auto loan refinancing can save you thousands of dollars, yet fewer than 5% of auto borrowers ever refinance. In Q3 2025, car owners who refinanced reduced their interest rate by an average of 2.08%, with average monthly savings of $77. With new car prices exceeding $48,000 and used cars remaining elevated, many Americans are locked into high-interest loans from the 2022-2024 rate spike.
The Auto Loan Refinance Calculator helps you determine if refinancing makes financial sense by calculating your potential monthly savings, total interest reduction, and break-even point. According to Experian data, super prime borrowers (781+) averaged 4.88% APR in late 2025, while subprime borrowers paid 15.85%—if your credit has improved or rates have dropped, refinancing could save you significantly.
How to Use the Auto Loan Refinance Calculator
- 1Enter your current loan balance (remaining principal owed on your auto loan).
- 2Input your current interest rate (APR) from your loan statement.
- 3Enter the remaining loan term in months.
- 4Input the new refinance rate you've been quoted (get quotes from multiple lenders first).
- 5Select your desired new loan term (shorter saves interest, longer reduces payments).
- 6Add any refinancing fees if applicable (typically $0-$300 for auto loans).
- 7Review your monthly savings, total interest savings, and break-even timeline.
Formula
Break-Even Months = Refinancing Fees / Monthly SavingsThe break-even formula determines how long you need to keep the refinanced loan before monthly savings offset any fees. Unlike mortgages, auto refinancing typically has minimal or no fees, making decisions more straightforward. Monthly payment uses standard amortization: PMT = [P × r × (1+r)^n] / [(1+r)^n - 1], where P is principal, r is monthly rate, and n is number of payments.
Auto Refinance Rates by Credit Score (2025-2026)
Current auto loan refinance rates vary dramatically by credit tier:
New Car Refinance Rates:
| Credit Score | Classification | Average APR |
|---|---|---|
| 781-850 | Super Prime | 4.88% - 6.50% |
| 661-780 | Prime | 6.50% - 9.50% |
| 601-660 | Near Prime | 9.50% - 14.00% |
| 501-600 | Subprime | 14.00% - 18.00% |
| Below 500 | Deep Subprime | 15.85% - 28.55% |
Used Car Refinance Rates (typically 1-2% higher):
| Credit Score | Average APR Range |
|---|---|
| 781-850 | 6.00% - 8.00% |
| 661-780 | 8.00% - 11.00% |
| 601-660 | 11.00% - 16.00% |
| 501-600 | 16.00% - 21.00% |
Rate Context:
- Federal Reserve cut rates 75 basis points in late 2025
- Auto rates are 1-2% lower than 2023-2024 peak
- Credit unions often offer 0.5-1% lower than banks
- Online lenders competitive for good credit borrowers
Key Insight: If you financed during 2022-2024 when prime borrowers paid 8-10%+, refinancing now at 5-7% could save you thousands.
The Auto Refinance Math Explained
Understanding the Numbers
Monthly Payment Formula:
PMT = [P × r × (1+r)^n] / [(1+r)^n - 1]
Where:
- P = Principal (remaining loan balance)
- r = Monthly interest rate (APR ÷ 12)
- n = Number of monthly payments
Example Calculation:
Current Loan:
- Balance: $25,000
- Remaining term: 48 months
- APR: 11%
- Monthly payment: $648
- Total remaining interest: $6,104
Refinanced Loan:
- Balance: $25,000
- New term: 48 months
- APR: 7%
- Monthly payment: $599
- Total interest: $3,738
Savings Analysis:
| Metric | Savings |
|---|---|
| Monthly payment | $49 |
| Total interest | $2,366 |
| Break-even (if $150 fee) | 3 months |
After month 3, every payment is pure savings.
The Power of Rate Reduction:
| Rate Drop | Monthly Savings ($25K/48mo) | Total Savings |
|---|---|---|
| 1% | $12 | $576 |
| 2% | $24 | $1,152 |
| 3% | $37 | $1,776 |
| 4% | $49 | $2,352 |
When Auto Refinancing Makes Sense
The Ideal Refinance Candidate:
1. Credit Score Has Improved Your score jumped 50+ points since original loan.
| Original Score | New Score | Potential Rate Drop |
|---|---|---|
| 620 (Near Prime) | 680 (Prime) | 3-5% |
| 680 (Prime) | 740 (Super Prime) | 2-3% |
| 580 (Subprime) | 650 (Near Prime) | 4-6% |
2. Market Rates Have Dropped Rates are at least 1-2% lower than your current rate.
- Even 1% on $25,000 over 4 years = $700+ savings
3. Original Loan Was Dealer Markup Dealers often mark up rates by 1-3% as profit.
- If you financed at dealership without shopping, you likely overpaid
4. You Need Lower Monthly Payments Extending term can reduce payments (though increases total interest).
Real-World Refinance Scenarios:
Scenario 1: Credit Improvement
- Original: $30,000 at 14% (score 620)
- After 18 months: $22,000 balance, score 700
- Refinance at 8% for 42 months
- Monthly savings: $87 | Total savings: $2,150
Scenario 2: Rate Drop Opportunity
- Original: $28,000 at 9.5% (2023)
- Current: $20,000 balance, 36 months remaining
- Refinance at 7% for 36 months
- Monthly savings: $26 | Total savings: $936
Scenario 3: Payment Relief Needed
- Current: $18,000 at 8%, $485/month, 40 months
- Refinance: 7.5% for 60 months
- New payment: $361 | Monthly savings: $124
- Trade-off: Pays $1,080 more total interest
When NOT to Refinance Your Auto Loan
Red Flags That Make Refinancing a Bad Idea:
1. You're Underwater (Negative Equity) Most lenders cap loans at 100-125% of vehicle value.
| Situation | Refinancing |
|---|---|
| Loan balance: $22,000 | Difficult |
| Car value: $18,000 | |
| Negative equity: -$4,000 | High risk to lenders |
2. Your Loan Is Almost Paid Off Fewer than 12-18 months remaining? Savings rarely justify hassle.
Example:
- Balance: $5,000
- 12 months at 10%
- Refinance to 7%
- Total savings: ~$80 (not worth paperwork)
3. Prepayment Penalty Exists Some subprime lenders charge penalties for early payoff.
- Read your contract carefully
- Calculate penalty vs. savings
4. New Term Extends Too Long Rule: Don't finance a car longer than you plan to keep it.
| Car Age | Maximum Recommended Term |
|---|---|
| New | 60 months |
| 1-3 years | 48 months |
| 4+ years | 36 months |
5. Fees Exceed Reasonable Break-Even If break-even exceeds 6 months, reconsider.
The Quick Math Test:
If (Monthly Savings × Remaining Months) - Fees < $500
→ Refinance likely not worth your time
How to Get the Best Refinance Rate
Step-by-Step Refinancing Strategy:
1. Check Your Credit First (Free)
- Use free services (Credit Karma, Experian, etc.)
- Dispute errors before applying
- Know which tier you fall into
2. Shop Multiple Lenders Apply to 3-5+ lenders within a 14-day window.
| Lender Type | Typical Rates | Best For |
|---|---|---|
| Credit Unions | Lowest (often -0.5%) | Members |
| Online Lenders | Competitive | Convenience |
| Banks | Mid-range | Existing customers |
| Captive Lenders | Varies | Specific brands |
3. Compare APR, Not Just Rate APR includes fees; rate doesn't.
4. Negotiate
- Ask lenders to match competitor quotes
- Inquire about rate discounts (autopay, loyalty)
Where to Get Quotes:
Credit Unions:
- Navy Federal, PenFed, Digital Federal
- Often best rates for members
- More flexible on LTV ratios
Online Lenders:
- LendingTree, myAutoloan, RateGenius
- Quick comparison shopping
- Good for non-credit union members
Banks:
- Bank of America, Chase, Capital One
- May offer discounts for existing customers
- Check if you qualify for relationship pricing
The Refinance Process: What to Expect
Timeline: 7-14 Days Start to Finish
Day 1-2: Preparation
- Gather documents
- Check credit scores
- Research current rates
Documents Needed:
| Document | Why Required |
|---|---|
| Current loan payoff statement | Exact balance owed |
| Vehicle registration | Proof of ownership |
| Proof of income | Pay stubs or tax returns |
| Proof of insurance | Coverage verification |
| Driver's license | Identity verification |
| Proof of residence | Utility bill or bank statement |
Day 3-5: Apply and Compare
- Submit applications to 3-5 lenders
- All inquiries in 14 days = one credit hit
- Review offers and negotiate
Day 6-10: Accept and Process
- Choose best offer
- Sign loan documents
- Lender pays off old loan
Day 11-14: Completion
- Old lender releases title
- New lender records lien
- Make first payment to new lender
Important Timing Notes:
- Wait 60-90 days after original purchase
- Wait for title to be in your name
- Best to have 6-12 months payment history
- Don't miss payments during refinance process
After Refinancing:
- Confirm old loan is paid off completely
- Update insurance if required by new lender
- Set up autopay for potential rate discount
- Keep records of old loan payoff
Credit Union vs Bank vs Online Lender
Refinance Lender Comparison:
Credit Unions: Best Rates
| Pros | Cons |
|---|---|
| Lowest rates (-0.5% avg) | Membership required |
| Higher savings ($95/mo avg) | Fewer branches |
| More flexible underwriting | May have lower loan limits |
| Better customer service | Limited online tools |
Top Credit Unions for Auto Refinance:
- Navy Federal: Military/veterans
- PenFed: Open membership
- Digital Federal (DCU): Open membership
- Alliant: Open membership
Banks: Relationship Value
| Pros | Cons |
|---|---|
| Existing relationship discounts | Mid-range rates |
| Convenient if already customer | More rigid requirements |
| Strong online/mobile tools | $56/mo avg savings |
| Easy integration | May require high credit |
Online Lenders: Convenience
| Pros | Cons |
|---|---|
| Fast application process | No in-person service |
| Easy comparison shopping | May sell loan to servicer |
| Competitive for good credit | Less flexibility |
| No membership required | Check reviews carefully |
Recommendation by Credit Tier:
| Credit Score | Best Option |
|---|---|
| 750+ | Online lenders or credit unions |
| 680-749 | Credit unions |
| 620-679 | Credit unions (more flexible) |
| Below 620 | Credit unions or captive lenders |
Pro Tips
- 💡Apply to at least 3-5 lenders within a 14-day window—all inquiries count as one credit check, and rates can vary 2-3% for the same borrower.
- 💡Time your refinance after credit score improvements cross major thresholds (620, 660, 700, 740) to unlock better rate tiers.
- 💡Credit unions consistently offer the best rates, averaging $95/month savings vs $56 at banks—consider joining one before refinancing.
- 💡Avoid extending your loan term beyond 48-60 months even if it lowers payments—the extra interest often exceeds monthly savings.
- 💡Skip refinancing if fewer than 18 months remain on your loan—savings rarely justify the paperwork and credit inquiry.
- 💡Get pre-qualified before applying to see estimated rates without a hard credit pull, then formally apply to top options.
- 💡Set up autopay with your new lender—many offer 0.25-0.50% rate discounts for automatic payments.
- 💡Don't stop making payments on your old loan during the refinance process—missed payments damage credit and can void approval.
- 💡Check your current loan for prepayment penalties before refinancing—some subprime lenders charge early payoff fees.
- 💡Keep old loan documents until you confirm the refinance lender has fully paid off the original loan and the title is properly transferred.
Frequently Asked Questions
The average refinance in Q3 2025 saved $77/month, with credit unions delivering $95/month savings. Total savings typically range from $500 to $3,000+ over the loan life depending on rate reduction and remaining balance. A 2% rate drop on $20,000 over 48 months saves approximately $1,000 in interest. Use the calculator with your specific numbers.
