When it’s time to refi your vehicle loan,as a first time car buyer, you’ll probably want to turn to an auto refinance calculator to get to the fine details about how much your new loan will save you over your old financing package. Also check out detailed data with our amortization chart The calculations involved with refinancing can be pretty complicated, but they’re made much simpler by using one of these handy tools.
When loan rates go down, it obviously makes sense to consider refinancing as a way to save some money. If you can get a lower annual percentage rate, then you can use the new loan to pay off the old loan and save the difference. As long as you don’t have any penalties written into your existing financing that prevent you from making a clean break and refinancing your current loan, you should be able to save a great deal of money — hundreds or even thousands of dollars over the life of your loan.
Before you even get to the auto refinance calculator, you’ll want to make sure there aren’t any penalties for closing out your loan before the agreed upon end of the term. Some lenders put in penalties that are basically “fines” to prevent you from doing exactly what you’re contemplating — saying goodbye to your current finance company and moving your loan to a different one. If you have a penalty involved in your current lending package, you may find that it just doesn’t make financial sense to refinance. (If that’s the case, then the penalties have done their job. They’re written into the loan specifically to keep you from doing a refi.) If there are no penalties attached to your loan, though, you can use an auto refinance calculator to find out just how much you can save by using a different lender to provide your financing.
You may already have a lender in mind. Or there might be several that you’ve already contacted. To have enough information to work the auto refinance calculator, you’ll need an offer or two from lenders who are willing to do refinancing. Each offer should contain an interest rate attached to a term. Once you get the information about your old loan, you can plug that into the calculator along with the information about your new loan. The calculator will be able to tell you exactly what your new payment will be, based on the new interest rate. Once you have that number, it’s pretty easy to see how much you’ll save by going to a new lender. Do the calculation for each of the offers you’ve received, and you’ll know pretty easily which refi deal is best.
There are a few caveats with doing a refi, but overall, if you work your auto refinance calculator the right way, you should know pretty quickly how much you can save.Written by: