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What they said · Refinancing

“We can cut your rate by two points.”

You owe $25,000 at 16.99%, 48 payments left at $721. The offer: 14.99% over a fresh 60 months. The payment drops by $127.

How much more does the lower-rate loan cost in interest?

$500
$0$3,000
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The real number

$1,057

It comes to $1,057.

Your guess—
The real figure$1,057

Two points off the rate, twelve months on the term. The term wins: $10,677 against $9,620 from today.

Why so much?

Why

A lower rate on a longer term can cost more. The extra year of interest outweighs two points.

Compare interest from today onwards, not rates. A rate cut only saves money if the term does not stretch past it.

Make it a saving

Take the 14.99% and keep paying $721: $7,964 in interest, done in 46 months.

Show me one move

One move

Take the rate. Keep the payment.

14.99%, new 60-month term

$595a month
$10,677interest from today

14.99%, keep paying what you pay now

$721a month
$7,964interest from today

$2,713 less than the offer as written, and $1,655 less than staying put.

No fee assumed. An origination fee makes the offer worse; the refinancing tool takes one.

Try it with my numbers

Now yours

Your refinance, your payment.

Paid off in 46 months (3.8 years). Interest in all: $7,964.

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The whole story, as text

“We can cut your rate by two points.” With a longer term.

“We can cut your rate by two points.” You owe $25,000 at 16.99%, 48 payments left at $721. The offer: 14.99% over a fresh 60 months. The payment drops by $127. How much more does the lower-rate loan cost in interest?

The answer

$1,057. Two points off the rate, twelve months on the term. The term wins: $10,677 against $9,620 from today.

Why

A lower rate on a longer term can cost more. The extra year of interest outweighs two points. Compare interest from today onwards, not rates. A rate cut only saves money if the term does not stretch past it. Make it a saving: Take the 14.99% and keep paying $721: $7,964 in interest, done in 46 months.

One move

Take the rate. Keep the payment. 14.99%, new 60-month term: $595 a month, $10,677 interest from today. 14.99%, keep paying what you pay now: $721 a month, $7,964 interest from today. $2,713 less than the offer as written, and $1,655 less than staying put. No fee assumed. An origination fee makes the offer worse; the refinancing tool takes one.

The refinancing tool shows the three columns side by side with a break-even month, so you can see when a rate cut actually pays.

Yours

Does refinancing help? runs these numbers for any loan. Nothing you enter leaves your browser.

Written and reviewed by Riverbend Crossroads Digital LLC, Friday, October 2, 2026. Figures from the Show Real Cost engine, computed exactly and shown to the cent. Educational, not advice; your lender's disclosures are the authoritative figures. How we calculate · Corrections.