About the Loan Refinance Calculator
This loan refinance calculator shows whether replacing an existing installment loan with a new one actually saves money. Enter what you still owe, your current rate and remaining months, then the new offer’s rate, term and fees. It compares the monthly payment, the total you would pay from today under each option, and how many months it takes for the payment savings to recover any upfront fee.
It is designed for personal loans, auto loans and other fixed-rate consumer loans — for example after your credit score has improved or rates have fallen. A lower payment is not always a better deal: extending the term can reduce the payment while increasing the total you pay. This tool shows both numbers so you can judge.
Fees can be paid upfront or rolled into the new loan. The comparison assumes both loans are fixed-rate and paid on schedule to the end, with no prepayment penalty on the current loan.
With the default inputs, the monthly payment savings is $28.17. Change any value above to recalculate instantly.
How to use the loan refinance calculator
- 1Enter your current balance, rate and the number of payments left.
- 2Enter the new loan’s rate and term from the refinance offer.
- 3Add any fees and choose whether they are paid upfront or rolled in.
- 4Check both the monthly savings and the net lifetime savings.
- 5Refinance only if you save overall or genuinely need the lower payment.
Formula and method
The current payment is re-derived from your balance, rate and months remaining with the standard amortization formula, which matches your actual payment if the loan has been paid on schedule. The new payment uses the same formula on the balance (plus fees if rolled in) at the new rate and term.
Net savings compares everything you would pay from today onward: remaining payments on the current loan versus all payments on the new loan plus any fees paid upfront. The break-even point divides upfront fees by the monthly saving; if fees are rolled in, there is no upfront cost to recover, but you pay interest on them instead.
- B
- Balance being refinanced
- r
- Monthly rate (annual rate ÷ 12 ÷ 100)
- n
- Number of monthly payments
- M_old, M_new
- Current and new monthly payments
Worked examples
$15,000 at 12% (36 months left) to 8% for 36 months, $300 fee
The current payment is $498.21. Refinancing at 8% over the same 36 months drops it to $470.05, saving $28.17 a month. After paying the $300 fee, you come out about $714 ahead and recover the fee in under 11 months.
Lower payment but longer term, fees rolled in
Moving $20,000 from 14% to 9% and stretching it to 60 months, with the $400 fee added to the loan, cuts the payment by $123 a month. Despite the extra year of payments, the rate drop still saves about $825 overall.
Small rate drop that does not pay off
Cutting the rate by only half a point saves $1.84 a month, so the $250 fee would take over 11 years to recover. Refinancing would cost about $206 more than keeping the current loan.
Frequently asked questions
When does it make sense to refinance a personal loan?+
Refinancing usually makes sense when you can get a meaningfully lower rate, the fees are small relative to the interest saved, and you do not extend the term so much that total cost rises. Improved credit is a common reason rates fall.
Does refinancing hurt my credit score?+
Applying triggers a hard inquiry, which may lower your score slightly for a short time, and a new account lowers the average age of your accounts. Paying the new loan on time generally outweighs these effects.
What is the break-even point on a refinance?+
It is the number of months of lower payments needed to recover the upfront fees. If you might repay or sell before then, refinancing may not be worth it.
Is it better to roll fees into the new loan?+
Rolling fees in avoids paying cash today, but you pay interest on them for the whole term. Paying them upfront is cheaper overall if you have the cash.
Can a lower monthly payment cost more?+
Yes. Extending the term spreads the balance over more payments, which can raise total interest even at a lower rate. Always compare net lifetime savings, not just the payment.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.