RightFiguresTwo calculated loans, one balance
Both schedules start from the balance you type. The current payment is calculated from that balance, the current rate and the remaining months. It can differ from the payment on a statement. There is no field for the statement payment.
The new loan uses the new rate and the new term. The amount financed stays equal to the current balance. The refinance fee is cash at closing. It is not added to the balance, and this page does not tell you to type the fee into the balance. Financing the fee would be a different loan.
Can I prepay without a penalty? says the contract and state law decide a prepayment penalty. This page does not add one, and it does not build a dated payoff quote.
Payment and interest are different questions
A lower regular payment is not the same as less interest. Comparing auto loan offers says to look past the monthly payment. The CFPB auto loan guide makes the same point about total cost. This page does not copy the guide’s sample rates.
An $18,000.00 balance at 9% for 48 months has a regular payment of $447.93, a final payment of $447.98 and $3,500.69 of interest. Replacing it at 6% for 48 months has a regular payment of $422.73. That is $25.20 less each month, and interest is $1,209.59 less. A $500.00 cash fee is recovered at month 20, when the regular-payment savings add to $504.00.
The same balance at 9% for 72 months, with no fee, has a regular payment of $324.46. That is $123.47 less each month, and the new loan charges $1,860.37 more interest.
Fee recovery counts only months when both loans still pay their regular amount. It stops before a different final payment and before either loan is paid off. A fee that would be recovered only on a different final payment is not reported as recovered. A comparison that ends in one month is not described as a saving each month.
A final payment more than twice the regular payment shows no comparison. That rejection is the car loan calculator’s modeling convention, not a mortgage Loan Estimate rule. Regulation Z § 1026.18 is the closed-end disclosure this page does not prepare.
The mortgage refinance calculator compares home loans, including a horizon. It is a different loan. Extra payments on one debt stay on the debt payoff calculator.
Sources & review
- How do I compare auto loan offers? — Consumer Financial Protection Bureau
- Can I prepay my loan at any time without penalty? — Consumer Financial Protection Bureau
- Take control of your auto loan — Consumer Financial Protection Bureau
- Financing or leasing a car — Federal Trade Commission
- Regulation Z § 1026.18, content of disclosures — Consumer Financial Protection Bureau
Last reviewed: . The formula is reproduced above so you can check the math independently.
Educational estimate only. A lender’s offer, statement payment and payoff quote can differ.