Car Loan Calculator
Calculate your monthly car payment, total loan cost, and see a detailed amortization schedule
Your Estimated Monthly Payment
Amortization Schedule
| Payment # | Payment | Principal | Interest | Remaining Balance |
|---|
Car Loan Calculator
Buying a car is exciting, but figuring out how much your car loan will really cost can feel overwhelming. That’s where a Car Loan Calculator becomes essential. With just three inputs—loan amount, loan term, and interest rate—you can quickly calculate your monthly car payment, total repayment, and total interest paid over the life of the loan.
What Is a Car Loan Calculator?
A car loan calculator is an online tool that helps you estimate your monthly car payment. By entering:
- Auto Loan Amount (the principal you borrow)
- Loan Term (months or years to repay)
- Interest Rate (annual percentage charged by the lender)
…the calculator instantly shows:
- Monthly Payment (principal + interest)
- Total of All Payments
- Total Interest Paid
This makes it easier to compare loan offers, understand affordability, and avoid surprises.
- Want to know how much car fits your budget? Try How Much Car Can I Afford.
- “For detailed payment schedules, use our Car Loan Payment Calculator.
How Car Loan Payments Work
Each monthly payment is split into two parts:
- Principal: The portion that reduces your original loan balance.
- Interest: The cost of borrowing money from the lender.
Over time, your payments gradually shift—early payments include more interest, while later payments apply more toward principal. This is explained through an amortization schedule, which you can generate using the calculator.
Formula Behind the Car Loan Calculator
If you’re curious, the monthly car loan payment is calculated using the standard loan amortization formula:
Monthly Payment = P × [ r(1 + r)^n ] ÷ [ (1 + r)^n – 1 ]
Where:
- P = Loan principal (amount borrowed)
- r = Monthly interest rate (annual rate ÷ 12)
- n = Number of monthly payments
Example:
For a $20,000 car loan at 6% annual interest over 60 months (5 years):
- P = 20,000
- r = 0.06 ÷ 12 = 0.005
- n = 60
Monthly Payment ≈ $386.66
Key Factors in a Car Loan Calculator
1. Auto Loan Amount
This is the total amount you borrow to purchase the car. The higher the loan, the higher your monthly payments.
2. Auto Loan Term
The loan term is the time you have to repay, usually measured in months. Common terms include:
- 36 months (3 years)
- 48 months (4 years)
- 60 months (5 years)
- 72 months (6 years)
Longer terms = lower monthly payments but higher total interest.
3. Interest Rate
The annual interest rate determines how much you pay in borrowing costs. Even a small difference in interest rate can significantly change your total repayment.
Example Car Loan Payment Scenarios
| Loan Amount | Term | Interest Rate | Monthly Payment | Total Paid | Total Interest |
|---|---|---|---|---|---|
| $15,000 | 36 mo | 5% | $449.56 | $16,184 | $1,184 |
| $20,000 | 60 mo | 6% | $386.66 | $23,199 | $3,199 |
| $25,000 | 72 mo | 7% | $426.15 | $30,682 | $5,682 |
This shows how term length and interest rate impact affordability.
What Is an Auto Loan Term?
A loan term is simply the repayment period for your loan. Most car loans come in 12-month increments. Shorter terms (like 36 months) mean higher monthly payments but lower interest overall. Longer terms (like 72 months) lower your monthly cost but increase the total interest you’ll pay.
Car Loan Interest Rates Explained
Your car loan interest rate depends on factors like:
- Credit Score: Higher scores usually qualify for lower rates.
- Income Stability: Lenders prefer consistent, long-term income.
- Loan Type: New cars often get better rates than used cars.
- Lender: Banks, credit unions, and dealerships may offer different rates.
Tip: Always shop around for the best interest rate before signing a loan agreement.
Down Payments and Sales Tax
Many buyers forget to factor in down payments and sales tax when estimating costs.
- Down Payment: Reduces your loan amount and lowers monthly payments.
- Sales Tax: Some states add this into the financed amount.
For example, if your car costs $25,000, you put $5,000 down, and your state charges 7% sales tax, your loan might be closer to $21,400 instead of the full $25,000.
Why Use a Car Loan Calculator?
A car loan calculator gives you the power to:
- Compare loan offers quickly
- Test different loan terms and interest rates
- Plan a budget before visiting the dealership
- Understand the true cost of your loan
By using it before committing, you avoid hidden costs and make more confident financial decisions.
Frequently Asked Questions About Car Loan Calculators
1. Do car loan calculators include insurance costs?
No. They only calculate principal and interest. Insurance must be budgeted separately.
2. Can I pay off my car loan early?
Yes, but check for prepayment penalties in your contract. Paying early can save thousands in interest.
3. What’s the average car loan interest rate?
Rates vary, but as of recent years, new car loans average around 5–6% for borrowers with good credit.
A Car Loan Calculator is more than just numbers—it’s a tool to help you take control of your car-buying journey. By entering your loan amount, term, and interest rate, you can see exactly how much your car will cost month-to-month and over the full loan.
Smart buyers use calculators to compare scenarios, negotiate better terms, and stay within budget. Before stepping into a dealership, try different loan setups with a calculator to avoid financial strain later.