Auto Loan Calculator
How to Calculate a Car Loan Payment
An auto loan calculator shows your monthly car payment before you step into a dealership, so you know exactly what you can afford. It also reveals the total interest and the true total cost of the vehicle.
Enter the vehicle price, your down payment, any trade-in value, the interest rate and the loan term. The calculator works out the loan amount and monthly payment with the standard amortization formula. A common rule: keep your total car payment under 10% of your monthly take-home pay.
Frequently Asked Questions
How is a car loan payment calculated?
The loan amount is the price minus your down payment and trade-in. The monthly payment is then computed with the amortization formula: M = P × r(1 + r)^n / ((1 + r)^n - 1), where r is the monthly rate and n is the number of months.
Should I choose a 48 or 72 month car loan?
A shorter term means a higher monthly payment but much less total interest. Longer terms (72-84 months) lower the payment but you pay more interest and risk owing more than the car is worth as it depreciates.
What is a good APR for a car loan?
It depends on your credit score and the market. Well-qualified buyers can often get rates near new-car promotions, while subprime borrowers pay much more. Improving your credit score before applying can save thousands in interest.