Car Loan Refinancing — 10% to 6%
Refinancing from 10% to 6% — what you actually save
Monthly savings by loan balance
| Loan Balance | Old payment (10%) | New payment (6%) | Monthly savings | Total savings (60mo) |
|---|---|---|---|---|
| $10,000 | $212 | $193 | $19/mo | $1,149 |
| $15,000 | $319 | $290 | $29/mo | $1,723 |
| $20,000 | $425 | $387 | $38/mo | $2,297 |
| $25,000 | $531 | $483 | $48/mo | $2,871 |
| $30,000 | $637 | $580 | $57/mo | $3,446 |
| $35,000 | $744 | $677 | $67/mo | $4,020 |
| $40,000 | $850 | $773 | $77/mo | $4,594 |
60-month remaining term assumed. Actual savings depend on your balance and remaining months.
Is a 4% rate drop worth the paperwork?
At 4%, this is a refinance worth doing. Most lenders charge no fees on auto refinancing. Free application, 24-hour approval, and $48 back in your pocket every month. The only reason not to: if you are within 12 months of paying the loan off.
Who this refinance actually makes sense for
10% to 6% is a 4-point improvement accessible to buyers who financed near-prime and have since improved their score by 40-60 points. It is also the natural outcome for buyers who used dealer financing when their credit union would have offered significantly less.
The 10% to 6% refinance is worth doing on any balance above $15,000 with 30+ months remaining. The total savings justify the paperwork at virtually any loan size in that range.
Cox Automotive data shows that 42% of new vehicle buyers in 2023 used dealer-arranged financing. Dealer financing markup over the lender buy rate averaged 1.8% during that period. If you are at 10%, there is a reasonable probability 1-2 points of that rate is dealer profit, not risk pricing.
Run your numbers
See your full Ownership Score with the new rate
Frequently Asked Questions — 10% to 6%
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