Refinance Savings Calculator
Compare your current loan to a refinanced loan and see the net savings after fees
Get your rate in minutes
No credit score impact
Borrow up to $500,000+
Refinance Calculator
Should You Refinance Your Loan?
Refinancing replaces your current loan with a new one. The new loan pays off the old balance. Net savings = current remaining interest − new total interest − origination fee. Only refinance if net savings are positive and you plan to keep the loan through break-even.
Key Takeaways
- Refinancing a $12,000 loan from 18% to 10% APR for the same 36-month term saves approximately $2,000 in interest — even after a 3% origination fee ($360), the net savings is $1,640.
- The break-even month shows when your cumulative monthly savings exceed the origination fee. At $47/month in savings and a $360 fee, break-even is month 8 — after that, every month is pure profit.
- The monthly payment drops from $434 to $387 — $47/month freed up for savings or debt paydown elsewhere. Over 36 months, that is $1,692 in payment reduction.
- The verdict automatically flips to “Refinancing Costs More” if the new rate is not low enough to offset the fee. Try raising the new APR until the verdict changes to see the minimum rate reduction that makes refinancing worthwhile.
- The rate scenario cards show net savings at four different rate reductions. This helps you set a target: “I need at least X% APR to make refinancing worth it.”
How to Use This Calculator
This calculator compares the total cost of keeping your current loan versus replacing it with a new loan at a lower rate. It accounts for the origination fee on the new loan, computes the net savings, and shows the break-even point where the savings exceed the fee.
Step 1 — Enter your current loan. Remaining balance (not original amount), current APR, and remaining term. These determine the interest you will pay if you keep the current loan.
Step 2 — Enter the refinanced loan terms. The new APR you expect to qualify for, the new term (can be same or different), and the origination fee percentage. Most personal loan refinances carry a 1%–6% origination fee. Set to 0% if the lender advertises no fees.
Step 3 — Read the verdict. The green or red verdict box shows the net savings (interest saved minus origination fee). The VS panel compares monthly payments, total interest, total cost, and term for both loans side by side.
Step 4 — Check the break-even. If the verdict is positive, the break-even month shows how long you need to keep the new loan for the savings to exceed the fee. If you might pay off the loan before break-even, refinancing may not be worth it.
Understanding the Results
The net savings is the headline number: total interest on the current loan minus total interest on the new loan minus the origination fee. A positive number means refinancing saves money. The larger the rate drop, the larger the savings. The fee erodes the savings — which is why break-even matters.
The break-even month divides the origination fee by the monthly payment savings. Before break-even, you have not yet recouped the fee. After break-even, every month is pure savings. If you plan to make extra payments and pay off the new loan in 12 months but break-even is month 15, refinancing is actually more expensive for you because you will not stay long enough to recoup the fee.
The rate scenario cards show four different rate drops from your current APR. Each shows the new payment, monthly savings, and net savings after fee. This helps you determine the minimum rate reduction needed: if a 2% drop shows negative net savings but a 4% drop is positive, you know your floor. Use this to negotiate with lenders or decide between competing offers.
When Does Refinancing Make Sense?
| Scenario | Verdict | Why |
|---|---|---|
| Rate drops 5%+ with same term | Almost always yes | Large rate drop produces savings that far exceed typical fees |
| Rate drops 2%–4% with same term | Usually yes | Check break-even — worth it if you keep the loan past that point |
| Rate drops <2% | Maybe | Fee may eat most of the savings — check net savings carefully |
| Same rate but shorter term | Yes (if affordable) | Shorter term = less total interest even at the same rate |
| Lower rate but much longer term | Often no | Extending the term can increase total cost despite the lower rate |
| Credit score has improved since original loan | Very likely yes | Higher score = lower rate. The rate drop is often 3%–8% |
Frequently Asked Questions
How much can I save by refinancing a personal loan?
It depends on the rate reduction and remaining balance. On a $12,000 loan, dropping from 18% to 10% saves about $2,000 in interest over 36 months — $1,640 net after a 3% origination fee. The calculator above shows your exact savings with your numbers.
What is the break-even point for refinancing?
The month when your cumulative monthly savings exceed the origination fee. If you save $47/month and the fee is $360, break-even is month 8. After that, every month is pure savings. If you plan to pay off the loan before break-even, refinancing costs more than keeping the original.
Does refinancing a personal loan hurt my credit?
Temporarily, yes — by 5–15 points from the hard inquiry and closing an old account. However, if the new loan has a lower utilization ratio or improves your credit mix, the score often recovers and may end up higher within 2–3 months. Prequalifying with a soft pull lets you compare offers without any score impact.
Should I refinance to a longer term for lower payments?
Only if you genuinely need the cash flow relief. A longer term lowers the payment but increases total interest — sometimes enough to erase the rate savings. The calculator lets you compare: set the new term longer than the current term and see if total cost goes up or down.
Can I refinance a loan with the same lender?
Some lenders offer refinancing of their own loans; others require you to use a different lender. Shopping across multiple lenders typically gets you the best rate. Most lenders allow you to prequalify online with a soft credit pull in under 5 minutes.
When is refinancing NOT worth it?
When the rate drop is small (under 2%), the fee is high (above 5%), you are close to the end of the loan (less than 12 months remaining), or you plan to pay off early before reaching break-even. The calculator flags these situations automatically with a red “Refinancing Costs More” verdict.
References & Further Reading
- CFPB — What Does Refinancing Mean?
- Federal Reserve G.19 — Consumer Credit
- FTC — Choosing a Personal Loan
Keep Reading
- Best Personal Loans — Compare refinance offers
- Early Payoff Calculator — Save with extra payments instead
- Loan Comparison Calculator — Compare two competing offers
- Credit Score Simulator — See if your score qualifies for a better rate
- All PrimeRates Calculators