REFINANCE CALCULATOR

Refinance Calculator

Loan refinance refers to the replacement of an existing loan with a new loan bearing different terms. The new loan pays off the outstanding amount of old loan. Loan refinance can be undertaken to reduce interest rate, to extend loan tenure, to reduce risk (such as by changing from a floating rate loan to a fixed rate loan) etc. Refinancing loan only works if the interest rates are low, and if it saves money. For a financial institution refinancing results into loss of interest income and therefore prepayment penalty is sometimes applicable. Prepayment charges are often expressed as a certain percentage of the total loan amount. This calculator helps you analyze the impact of loan refinancing and the associated cost savings. It provides following information:

• EMI paid (for older loan)
• Outstanding Principal
• Remaining Duration
• Amount of New Loan
• New EMI
• Difference between EMIs
• Total Savings per annum
• Total Savings for Remaining Duration

This calculator can be used for any type of loans including home loan, personal loan, car loan etc.

Assumptions:

• The interest rate for both loans remain fixed during the loan tenure
• Interest rate is compounded monthly

Other calculators you may find useful

• Loan affordability calculator
• Investment - Monthly Saving Calculator
• Prepayment calculator
• Investment - Present value calculator

Articles you may find useful:

Should Ram switch his home loan?
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