{
  "id": "auto-refinance",
  "version": "81dcc07a7bec",
  "status": "published",
  "name": "Auto Refinance Calculator",
  "question": "Will an auto refinance save money?",
  "summary": "Compares your current car loan with a refinanced loan: the new monthly payment, the interest on each, the total saving after fees, and the break-even month.",
  "category": "finance",
  "subcategory": "loans",
  "url": "https://www.acalculator.org/finance/auto-refinance-calculator",
  "markdown": "https://www.acalculator.org/finance/auto-refinance-calculator.md",
  "kind": "schedule",
  "method": "payment = L × r ÷ (1 − (1 + r)^−n) for each loan, with r = APR ÷ 12; each month interest = balance × r; saving = every payment left on the current loan − (every new payment + fees paid up front).",
  "assumptions": [
    "Your current loan is on schedule: its payment is the level payment that clears today’s balance in the months left.",
    "Both loans have fixed rates, monthly payments at the end of each month, and interest at APR ÷ 12.",
    "The last payment of each loan clears whatever is left.",
    "Fees are either paid up front or added to the new loan balance.",
    "This is an estimate, not financial advice. Check the lender’s disclosures for the actual APR and fees."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "balance": {
        "title": "Loan balance today",
        "description": "What you still owe on your car loan (the payoff amount).",
        "type": "number",
        "x-unit": "USD",
        "exclusiveMinimum": 0,
        "maximum": 10000000
      },
      "rate": {
        "title": "Current APR",
        "description": "The yearly interest rate of your current loan. The monthly rate is this divided by 12.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 50
      },
      "left": {
        "title": "Months left on your loan",
        "description": "How many monthly payments your current loan has left.",
        "type": "integer",
        "minimum": 1,
        "maximum": 120
      },
      "newrate": {
        "title": "New APR",
        "description": "The yearly interest rate of the new loan.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 50
      },
      "newterm": {
        "title": "New loan length (months)",
        "description": "The number of monthly payments on the new loan.",
        "type": "integer",
        "minimum": 1,
        "maximum": 120
      },
      "fees": {
        "title": "Refinance fees",
        "description": "Fees to refinance, such as a lender fee, title transfer, or a prepayment penalty on the old loan.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000
      },
      "roll": {
        "title": "Add the fees to the new loan",
        "description": "When on, the fees are borrowed in the new loan. When off, you pay them up front.",
        "type": "boolean"
      }
    }
  },
  "outputs": {
    "newPayment": {
      "label": "Your new monthly payment",
      "description": "The level monthly payment of the new loan.",
      "format": "money"
    },
    "oldPayment": {
      "label": "Your current monthly payment",
      "description": "The level payment that clears today’s balance at the current APR in the months left.",
      "format": "money"
    },
    "monthly": {
      "label": "Monthly saving",
      "description": "The current payment minus the new payment. Below zero, the new payment is higher.",
      "format": "money"
    },
    "oldInterest": {
      "label": "Interest if you keep your loan",
      "description": "All the interest left on the current loan.",
      "format": "money"
    },
    "newInterest": {
      "label": "Interest on the new loan",
      "description": "All the interest on the new loan.",
      "format": "money"
    },
    "oldTotal": {
      "label": "Total cost if you keep your loan",
      "description": "Every payment left on the current loan.",
      "format": "money"
    },
    "newTotal": {
      "label": "Total cost if you refinance",
      "description": "Every payment on the new loan plus any fees paid up front.",
      "format": "money"
    },
    "saving": {
      "label": "Total saving",
      "description": "The total cost of keeping your loan minus the total cost of refinancing. Below zero, refinancing costs more.",
      "format": "money"
    },
    "breakEven": {
      "label": "Fees paid back after",
      "description": "The months of lower payments it takes to repay fees paid up front: fees ÷ monthly saving, rounded up. Shown when both are above zero and it is within the new loan’s length.",
      "format": "integer"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "balance": 25000,
      "rate": 9,
      "left": 48,
      "newrate": 6,
      "newterm": 48,
      "fees": 0,
      "roll": false
    },
    "outputs": {
      "newPayment": 587.1257261983907,
      "oldPayment": 622.1260593483554,
      "monthly": 35.00033314996472,
      "oldInterest": 4862.0508487210645,
      "newInterest": 3182.0348575227545,
      "oldTotal": 29862.050848721065,
      "newTotal": 28182.034857522754,
      "saving": 1680.01599119831
    },
    "text": "Refinancing $25,000.00 at 6% over 48 months makes your payment $587.13 (now $622.13), a total saving of $1,680.02."
  },
  "examples": [
    {
      "given": {
        "balance": 20000,
        "rate": 4.75,
        "left": 72,
        "newrate": 4.75,
        "newterm": 36
      },
      "expect": {
        "oldPayment": 319.7844891053688,
        "oldInterest": 3024.4832155862605,
        "newPayment": 597.1756342744361,
        "newInterest": 1498.322833879447
      },
      "source": "CFPB, How do I compare auto loan offers? ($20,000 at 4.75%: $320 and $3,024 over six years, $597 and $1,498 over three years); full values by hand in content.mdx"
    },
    {
      "given": {
        "balance": 15000,
        "rate": 12,
        "left": 36,
        "newrate": 6,
        "newterm": 36,
        "fees": 300,
        "roll": false
      },
      "expect": {
        "oldPayment": 498.2146471927675,
        "newPayment": 456.3290617733356,
        "monthly": 41.88558541943189,
        "breakEven": 8
      },
      "source": "hand calculation in content.mdx: 300 ÷ 41.89 = 7.2, rounded up to 8 months"
    },
    {
      "given": {
        "balance": 10000,
        "rate": 0,
        "left": 20,
        "newrate": 0,
        "newterm": 40,
        "fees": 200,
        "roll": true
      },
      "expect": {
        "oldPayment": 500,
        "newPayment": 255,
        "oldTotal": 10000,
        "newTotal": 10200,
        "saving": -200
      },
      "source": "hand calculation in content.mdx: 0% loans divide evenly; the $200 fee is borrowed"
    }
  ],
  "sources": [
    "Consumer Financial Protection Bureau, How do I compare auto loan offers? What should I look at besides the monthly payment? https://www.consumerfinance.gov/ask-cfpb/how-do-i-compare-auto-loan-offers-what-should-i-look-at-besides-the-monthly-payment-en-753/",
    "Consumer Financial Protection Bureau, Should I refinance? (handout). https://files.consumerfinance.gov/f/documents/cfpb_should_i_refinance_handout.pdf",
    "Consumer Financial Protection Bureau, Auto loans. https://www.consumerfinance.gov/consumer-tools/auto-loans/"
  ],
  "related": [
    "auto-loan"
  ],
  "changelog": []
}