Business Tools

Free Loan Refinance Calculator

Refinancing a loan can save real money — or cost it, once you factor in processing fees. This tool compares your existing loan against a new offer side by side, quantifies the interest saved and tells you the breakeven month if there are upfront fees.

Results

Current payment$10,731.00
New payment$10,145.03
Monthly saving$585.96
Old total repayment$515,087.92
New total repayment$486,961.60
Net savings (after fee)$26,126.32

Break-even on refinancing fee: month 4.

Disclaimer: This calculator provides estimates only and does not constitute financial advice. Actual loan terms may vary by lender.

What the Loan Refinance Calculator does

Refinancing replaces an existing loan with a new one, usually to get a lower interest rate, a lower monthly payment or a different term. The breakeven point tells you how many months it takes for the savings from refinancing to cover any upfront switching fee.

Methodology and formula

Monthly savings = Old monthly payment - New monthly payment; Breakeven month = Refinancing fee / Monthly savings; only after that month does refinancing produce net savings.

Worked example

Inputs
Existing loan balance 40,000 at 11% with 4 years left; new offer at 8.5% for the same remaining term; refinancing fee 800.
Result
Old monthly payment about 1,041; new monthly payment about 987; monthly savings about 54; breakeven about 15 months.

If the borrower plans to keep the loan for at least 15 months, refinancing pays off; if they expect to close or sell within a year, the fee outweighs the savings.

When to use this tool

Use this once you already hold a loan and want to compare it against a new offer. Use the Business Loan Calculator when sizing a brand-new loan, and the Loan ROI Calculator if the real question is whether the funded project justifies borrowing at all.

About the Loan Refinance Calculator

When refinancing makes sense

Rule of thumb: refinance if the new rate is at least 0.5–1% lower than your current rate and you'll hold the loan long enough to recover the switching fees. This calculator gives you the exact breakeven month so you don't have to guess.

What the breakeven month means

If refinancing has an upfront fee and your new monthly payment is lower, you save a fixed amount each month. Breakeven month = Fee ÷ Monthly Savings. Only after that month does the refinance actually put money back in your pocket.

Beyond the number

The calculator shows financial savings only. Also weigh: tenure change (a longer tenure can lower monthly payment while raising total interest), prepayment penalty on the existing loan, and any documentation cost the lender doesn't advertise.

Frequently asked questions

When is refinancing worth it?

When the new rate is meaningfully lower (at least 0.5–1%), you plan to hold the loan past the breakeven month, and any prepayment penalty on the old loan is smaller than your projected savings.

Should I keep the same tenure or shorten it?

Keeping the same tenure lowers the monthly payment most. Shortening it saves the most interest overall. Use both scenarios in this tool to compare.

What is the breakeven month?

The number of months it takes for your accumulated monthly savings to equal the upfront refinancing fee.

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