Home › Guides › Refinance your car loan

Should you refinance your car loan?

Refinancing replaces your current auto loan with a new one — ideally at a better rate. Here is when it is worth doing.

Good signs to refinance

• Rates have dropped since you took the loan.
• Your credit improved, so you now qualify for a lower APR.
• Your original loan was high-rate — for example, dealer financing with bad credit.
• You want a shorter term to pay off the car faster and save interest.

When to skip it

• You are near the end of the loan — most interest is already paid.
• The car is worth far less than you owe.
• Fees or prepayment penalties wipe out the savings.

How to estimate your savings

Compare your current payment and remaining interest with a new loan at the better rate. Enter the remaining balance as the "vehicle price" (with zero down and trade) and the new APR and term into the calculator to estimate the new payment and total interest.

General information, not financial advice.