How do I calculate if refinancing my car loan saves money?
You calculate savings by comparing your current loan's total cost to a new loan's total cost. Gather your loan details and use a free online calculator. If the new total interest paid drops by $500 or more, you save money.
Here's what you need to know
Use these steps to run the numbers:
- Find your current loan details: remaining balance (say $15,000), interest rate (like 13.74%), remaining months (36), and monthly payment ($511).
- Get a new loan quote: shop rates around 7-9% for good credit in 2026. Pick a new term, like 36 or 48 months.
- Plug numbers into a calculator. It shows new payment, monthly savings, and lifetime interest savings.
- Subtract fees: many refinances cost $0-300. Savings must beat fees by 6-12 months to break even.
| Loan Detail | Current Loan Example | New Loan Offer 1 (9.01%, 36 mo) | New Loan Offer 2 (7.05%, 48 mo) |
|---|---|---|---|
| Monthly Payment | $511 | $477 | $360 |
| Monthly Savings | $0 | $34 | $151 |
| Total Interest Savings | $0 | $1,222 | $1,138 |
This table shows real examples from owner data. Offer 1 saves $1,222 over 36 months. Offer 2 cuts payments more but stretches the loan.
Step-by-step guide to calculate
- Check your loan statement. Note remaining balance, APR, monthly payment, and months left. Call your lender if needed.
- Shop new rates. Use sites like credit unions or banks. Good credit gets 6-8% APR as of February 2026. Bad credit might see 10-14%.
- Run the calculator. Enter current details first. Then test new rate and term. Try 36 months to pay off fast, or 48-60 for lower payments.
- Factor in all costs. Add refinance fees ($100-300 typical). Divide fees by monthly savings for break-even months. Under 12 months? Refinance now.
- Test scenarios. Keep term same to cut interest. Extend term to drop payments, but watch total interest rise.
Sidekick pulls your loan data and runs these calcs instantly. Many drivers save $1,000+ yearly.
When refinancing saves the most
Refinance if your rate tops 10% and you find 7% or lower. Credit improved since original loan? You qualify for better terms. Rates dropped in 2026? Act fast.
Example: $20,000 balance at 12% over 48 months costs $5,200 interest. At 8% same term, interest drops to $3,100. You save $2,100.
Skip refinance if under 12 months left or fees eat savings. Always prequalify without credit hits.
Track your full ownership costs with Sidekick. It factors insurance, maintenance, and fuel too.