# Refinance Calculator

## What is the meaning of refinance?

Generally, refinance means that it is the replacement of the current debt obligation to that of the other debt obligation. However, the terms shall certainly differ. Another aspect that one has to keep it in mind is that the terms related to refinancing would depend on the country among the other economic factors. At times, refinancing is also known as the debt restructuring but it is denoted as such only when the replacement of the debt tends to occur under the financial distress.

## Refinance Calculator

 Future Value(FV): Rs Interest rate(ir): % Number of periods(np): Payment(pmt): Rs Payment at the begining: Rs Payment at the end: Rs

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With the cash – out option, there are very slight or almost no chances of having the monthly payment shorten or for that matter the mortgage periods but this cash – out option, can be used in home improvement, credit cards etc. as far as refinancing is concerned.

## Finance calculator formulae related to refinance calculator

### $$PV= – FV(ir+1)^{-np}-pmt+pmt(ir+1)^{-np}- \frac{pmt}{ir}+\frac{pmt}{ir } (ir+1)^{ -np}$$

If we look at the equations mentioned above, PV = present value whereas the future value is represented by FV. The term ir stands for the rate of interest or the interest rate. On the other hand, np = number of periods with pmt being payment.

## Other formulae used in a refinance calculator –

$$know\, the\, rate\, as\, this\, will\, influence\, you$$

$$but\, never\, go\, for\, the\, advertised\, rates$$

$$check\, costs\, which\, are\, associated \,with\, refinancing$$

$$costs\, such\, as\, these \,will\, be\, applicable:$$

$$appraisal \,fee\,,\,loan \,origination\, fee,\,application\, fee,\,inspection \,fee$$

$$also\, check\, for \,the\, prepayment\, fee\, before\, you\, finally \,go\, ahead.$$

## How to use a refinance calculator?

An online refinance calculator is basically divided into 3 aspects which are – (1) current loan (2) new loan & the (3) cash – out & cost. An individual will have to enter the following details to calculate refinance. Firstly enter the original amount of the current loan followed by the loan term & then the interest rate & yes do not forget to mention the time remaining in years & months. In the next block that is the new loan, you will have to mention the new loan term again in months & years. This is further followed by the interest rate & then the points.

Finally in the last block which is cash – out & cost, an individual will be required to enter the cash – out amount while in the 2nd field, you must enter the costs. When all the details have been mentioned, you can click on the calculate tab to know the result of the refinance calculator.

## What is the use of a refinance calculator?

Essentially with this online & free refinance calculator, an individual will be in a position to plan for the loan while placing together a number of options & as this online refinance calculator tool has the feature to check not only the existing loan but also the refinanced loan on the same page, it would beyond any question be a very useful tool for the people.