If you had bad credit when you applied for a vehicle loan, chances are you are having to pay a high interest rate on your repayments. The good news is that if you have been making your payments in full and on time each month for at least six months, and are not in negative equity (i.e. the amount you still have left to pay on your loan is not more than the car is worth) you may be able to refinance your car and significantly lower your interest rate. A refinance car loan calculator can help you decide whether refinancing is worth it for you now, or whether you should wait a while.
There’s a lot to think about when working out whether refinancing your car is worth it. A good refinance car loan calculator can help you with all the calculations and save your brain from spinning. Many lenders offering refinancing options have free refinance car loan calculators on their websites so the best thing to do is to visit as many as you can, checking their rates, to figure out which company best matches your requirements. Your current lender is very unlikely to offer a refinancing option so you will have to look to other lenders. It’s important to do your research and make sure you’re doing what’s best for your situation, which may not be refinancing at all right now.
A lender’s refinance car loan calculator will compare your current monthly loan repayments to what you would pay with a loan from their institution, which may or may not be better.
Usually a refinance car loan calculator will require you to fill in your current loan amount, term and interest rate and will then bring up what they would charge. Be aware, however, that these calculators are merely speculative – they do not take into consideration credit history, which the lender will when you come to apply for a refinance loan.
The refinance car loan calculators assume you have a credit score so the actual interest rate they quote you may be higher. However, you can check your credit score online and if you know you have good credit, a refinance car loan calculator could be a good indicator of the savings you could make if you refinanced. It is a good idea to check your credit report anyway, to make sure that it is up to date and correct. Just one error could seriously affect your score and, in turn, the likelihood that you will be able to get a better interest rate by refinancing your car loan.
There are a number of things you should do before deciding whether to refinance your auto loan – look at the documentation on your current loan to see whether there is a penalty fee for refinancing, check your credit report, look into how much you have already paid off on your loan. That you must do yourself, but once you have all the information, a refinance loan calculator can show you just how much you might be able to save if you refinanced your car loan.