The amount you can save by refinancing your car loan depends on various factors such as your credit score, the interest rate on your existing car loan, the length of the loan term, and the current market conditions. Generally, if you can refinance to a lower interest rate, you can save money on interest charges over the life of the loan.
For example, if you have a 5-year car loan with an interest rate of 7% and you owe $20,000, your monthly payment will be around $396 and you will pay approximately $3,760 in interest charges over the life of the loan. However, if you refinance the loan to a lower interest rate of 4%, your monthly payment will drop to around $367, and you will pay approximately $2,027 in interest charges over the life of the loan, saving you over $1,700 in interest charges.
It’s important to calculate your potential savings based on your individual circumstances and compare different loan options before deciding to refinance.