How to use
Enter the vehicle price, your down payment, the interest rate and the loan term in months. The monthly payment updates as you type. The chips fill in common terms from 24 to 84 months.
If the lender charges up-front fees, such as an origination fee, enter them under “Prepaid finance charges”. The calculator then shows the APR with those fees included. Open “Amortization schedule” to see how much of each payment goes to principal and interest.
How it is calculated
Auto loans are usually repaid in equal monthly payments:
monthly payment = amount financed × r ÷ [1 − (1 + r)^−n]
Here, amount financed = vehicle price − down payment, r = annual rate ÷ 12, and n = number of months. Each month’s interest is the remaining balance × r, and the rest of the payment reduces the balance. Early payments are mostly interest, and later payments are mostly principal.
The APR is the yearly rate at which the payments add up to the money you actually receive (the amount financed minus fees).
Example
A $35,000 car with $5,000 down, so $30,000 financed at 7%:
| Term | Monthly payment | Total interest |
|---|---|---|
| 48 months | about $718 | about $4,483 |
| 60 months | about $594 | about $5,642 |
| 72 months | about $511 | about $6,826 |
| 84 months | about $453 | about $8,034 |
In the first month of the 60-month loan, $175 of the payment is interest and about $419 goes to principal. With a $500 fee paid up front, the APR rises from 7% to about 7.71%.
Before you sign
- Get pre-approved: a quote from a bank or credit union shows you a rate to compare with dealer financing.
- Compare APRs, not monthly payments: a lower payment can come from a longer term rather than a better rate.
- 0% APR deals: the interest is real savings, but these deals sometimes replace a cash rebate. Compare “0% APR” with “rebate plus your own loan” using this calculator.
- Negotiate: the price, the rate and the term can all be negotiated.