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Car Loan Calculator

Quick answer

This calculator computes monthly car loan payments easily.

  • Compare auto financing options, interest rates, and total costs.
  • Essential tool for car buyers.

Figures are estimates from this calculator’s standard formula — adjust the inputs in the tool below for your exact number.

How Car Loan Calculation Works

Monthly Payment = P × [r(1+r)^n] / [(1+r)^n - 1]

This calculator uses the standard amortization formula where P is the principal loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the total number of payments. It calculates monthly payments, total interest, and payoff timeline.

  1. 1

    Enter Vehicle Price

    Input the total purchase price of the vehicle

  2. 2

    Subtract Down Payment

    Enter any down payment or trade-in value to reduce loan amount

  3. 3

    Set Interest Rate

    Input the annual interest rate (APR) from your lender

  4. 4

    Choose Loan Term

    Select loan duration in months (36, 48, 60, 72, etc.)

Use Cases

Affordability Planning

Determine maximum vehicle price based on target monthly payment

Loan Comparison

Compare different loan terms and interest rates side by side

Down Payment Impact

See how different down payment amounts affect monthly costs

Dealer Negotiation

Know your numbers before negotiating with dealers

Tips

  • 1

    Get pre-approved from banks or credit unions before dealer shopping

  • 2

    Shorter loan terms cost more monthly but save thousands in interest

  • 3

    Compare APR (includes fees) not just interest rate when shopping

  • 4

    A 20% down payment avoids being underwater on the loan

  • 5

    Don't share your monthly payment target with dealers - negotiate on price

Common Mistakes

  • Focusing on monthly payment instead of total loan cost

  • Accepting dealer financing without comparing other options

  • Extending loan terms beyond 60 months just to lower payments

  • Forgetting to include tax, title, and fees in loan amount

FAQs

What is a good car loan interest rate?

Rates depend on credit score and market conditions. Excellent credit (750+) typically gets 4-6% for new cars. Good credit (700-749) gets 6-9%. Fair credit (650-699) may see 9-14%. Used car rates are usually 1-2% higher.

How long should my car loan be?

Shorter is better for total cost. 36-48 months minimizes interest but has higher payments. 60 months is a common balance. Avoid 72-84 months unless necessary - you pay thousands more and risk negative equity.

How much should I put down?

Aim for 20% on new cars, 10% on used. This reduces your loan amount, lowers monthly payments, and helps prevent owing more than the car is worth as it depreciates.

Should I finance through the dealer?

Sometimes. Dealers occasionally offer promotional rates (0% or low APR) that beat banks. But always get pre-approved first so you have a comparison. Don't let dealers mark up the rate.

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