Are you thinking about refinancing your auto loan?
This calculator can be a valuable tool for anyone considering auto refinancing.
Refinancing an auto loan has the potential to save anyone a significant amount of money. By trading in your old high-interest auto loan for a new low-interest loan, your monthly car payment will be lower. That means you’ll have more money in your pocket each month. More than that, it can also mean that you’ll save thousands of dollars over the life of the loan. Using a calculator, you can experiment with different interest rates and loan terms to see just how they will impact your monthly payment.
When using one, you only need a few pieces of information to compare your existing auto loan to a refinanced auto loan. You will want to know exactly what your interest rate is now, your loan term in months and the original loan amount. Try entering each of these numbers in the refinancing calculator and then click “calculate.” The resulting monthly payment should come very close to your actual car payment.
Now, let’s assume that you are refinancing your auto loan at a lower interest rate but with the same loan term. Entering the new interest rate into the calculator with your original loan term and original loan amount, you will see that the monthly payment has gone down. Just how much it goes down depends on how much better the new rate is than the old rate. Keep in mind that your actual loan amount should also be lower than the original amount by now if you have been making car payments. That means that your car payment will be even lower than this example shows. For a truly accurate estimate, check with your current lender to get the “payoff balance” of your auto loan. That should be the loan amount for your new auto loan.
You will also notice a difference in your monthly payment if you change your loan term in the auto calculator. The longer your loan term in months, the lower the monthly payment will be. Extending your loan term will give you lower monthly payments but you will be paying more interest on your loan in the long run. It is important to weigh the advantage of a lower payment now to the disadvantage of ending up paying more for your vehicle.
To get the most effective use of it, make sure that you know current interest rate levels. You can’t always count on getting the very best rate, so putting a range of rates in the calculator will let you know what you can expect.
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