Refinancing Calculator
Compare your current loan with a refinancing offer, and see how much you could save per month and in total by switching to a lower rate.
How to use the refinancing calculator
- Enter the remaining loan balance — what you still owe.
- Enter your current interest rate and the rate you're offered on the new loan.
- Enter the remaining term — the calculator shows how much you save per month and in total.
How the savings are calculated
The calculator computes the monthly payment with the amortization formula for both the old and the new loan, using the same loan amount and term, and compares them:
where L is the loan amount, r is the monthly interest rate, and n is the number of months.
Worked example: $25,000 with 5 years left costs $608 a month at 16 %, but $519 at 9 %. The saving is 608 − 519 = $89 a month and $5,340 over the full term. A $300 fee to switch is recovered after 300 ÷ 89 = 3.4 months. The fee looks large in isolation, but it is the smallest number in the calculation.
Refinancing is often used to consolidate expensive consumer loans and credit card debt into a single loan with a lower rate, which can significantly lower your monthly expenses.
If you enter an expected fee for switching (an origination fee on the new loan and/or a payoff fee on the old one), the calculator also shows how many months it takes before the monthly savings have covered the fee — the "break-even" point for the refinancing.
Frequently asked questions
When does it pay off to refinance?
It's usually worthwhile when the new rate is noticeably lower than the old one, and the remaining term is long enough that the savings exceed any fees involved in switching.
Does refinancing affect my credit score?
A credit check when applying for refinancing can cause a small, temporary dip in your credit score, but this usually normalizes quickly.