How the saving is worked out
Each payment uses the note rate divided by 12. The saving is the interest left on your current loan, minus the interest on the new one, minus closing costs and fees paid upfront. The break-even month is the costs divided by the monthly saving.
Worked example
You owe $15,000 at 13% with 48 months left: $402.41 a month and $4,315.80 of interest to come. Refinancing for 48 months at 9% costs $373.28 a month and $2,917.23 of interest. After $300 of closing costs you save $1,098.57 and break even in 11 months.
Stretching a $25,000, 36-month loan at 10% to 72 months at 8.5%, with $500 of closing costs, lowers the payment but costs $3,460.62 more overall.
Origination fees and prepayment penalties
Many personal loans charge an origination fee, often taken out of the new loan. Check your current loan for a prepayment penalty too; most personal loans have none.
To work out your payoff amount, use the US loan prepayment penalty calculator .
What this calculator assumes
Fixed rates, the same balance on the new loan and costs paid upfront. If fees are added to the loan, you'll pay interest on them too.
Borrowing in the UK?
The country choices above the inputs open separate local pages. UK lenders quote an APR, and the old lender may charge an early repayment charge capped by law. Choosing United Kingdom opens that page and resets the inputs; amounts are not converted.
For the UK version, use the UK loan replacement calculator in pounds.
Inputs for the US loan refinance calculator
Balance left on your loan
What you still owe, in US dollars.
Current interest rate
The note rate on your loan now.
Months left
How many payments you still have to make.
New interest rate
The note rate on the refinance offer.
New loan term
How many months the new loan would run.
Closing costs and fees
Origination and other fees on the new loan.
CALCULATOR QUESTIONS
US loan refinance calculator questions
When does refinancing a loan make sense?
When the interest you save is more than the fees, and the new term isn't much longer.
What is the break-even point?
The month when lower payments have covered the refinancing costs. If you'll pay off the loan before then, it may not be worth it.
Can I refinance a car loan?
Yes, many banks and credit unions refinance auto loans, especially if your credit has improved.
Does refinancing hurt my credit?
There's a hard inquiry and a new account, which may dip your score briefly.