Would refinancing lower your total cost?
Refinancing replaces existing borrowing with new borrowing. Compare what you would pay from today under each option, including the new loan's fees and repayment schedule.
Gather both sides of the comparison
For your current debt, collect the payoff amount and remaining payment schedule. For the new loan, collect the amount borrowed, funds actually received, interest rate, disclosed APR, payment amount, term, and fees.
A lower monthly payment may reflect a longer term and can cost more overall.
Follow the fee through the calculation
If a hypothetical $10,000 loan deducts a 5% origination fee from proceeds, only $9,500 reaches you or your creditors. That does not fully repay a $10,000 balance.
What is borrowed, and what arrives
proceedsfee held back
$10,000 needed
To receive $10,000 after a fee equal to 5% of principal, the principal would need to be approximately $10,526.32: $10,000 ÷ 0.95. This example assumes the lender allows that amount and uses that exact fee convention.
Compare actual cash outflows
Suppose the current plan requires 24 remaining payments of $500: $12,000 in total. A hypothetical replacement requires 36 payments of $350 plus a $300 fee paid separately: $12,900. The monthly payment falls by $150, but total outflow rises by $900 and repayment lasts 12 more months.
Everything paid, from today
- Current plan$12,00024 payments of $500
- Replacement$12,90036 payments of $350, plus a $300 fee
- −$150
- a month
- +$900
- in total
- +12 months
- of repayment
This comparison assumes the replacement fully pays the old debt, no additional costs, and no new borrowing. It is payment-schedule arithmetic, not a quoted loan or an APR calculation.
Questions
- Should I add every fee to total payments?
- Include fees paid separately. If a fee is financed and already included in the repayment schedule, adding it again would double-count it.
- Can I use advertised APR as the loan’s interest rate?
- Not interchangeably. APR can reflect certain fees as well as interest. Use the lender’s actual rate and payment disclosures when modeling cash flows.
- Does Moniti guarantee a rate or savings?
- No rate or savings is promised by these examples.
- Does this guide cover federal student-loan decisions?
- No. This page focuses on ordinary consumer-debt cost comparisons and does not evaluate program benefits or protections.