Auto Loan Calculator
Monthly car payment, total paid, and total interest for any price, rate, and term.
What it does
A car loan works like any fixed installment loan: equal monthly payments split into interest and principal, with interest shrinking as the balance falls. The amount financed is the part that truly matters, which is the sticker price minus down payment and trade in, plus any fees you roll into the loan.
The tool above prices that loan from amount, APR, and term. It returns the monthly payment, the lifetime total, and the lifetime interest, so short and long terms can be compared side by side.
Long car terms deserve a second look. Seven or eight year loans cut the payment but pile on interest and can leave you owing more than the car is worth for years. Five years or less keeps most buyers near the value curve.
How to use
- Enter the amount financed, not the sticker price.
- Enter the APR from the lender offer, not a rounded ad rate.
- Enter the term in years and compare the monthly payment with your budget.
- Check total interest across terms before signing a longer loan.
Formula
- P
- Amount financed including rolled fees.
- r
- Monthly rate: APR divided by 12.
- n
- Month count: years times 12.
Dealer quotes sometimes bundle extras into the financed amount, so verify P on the buyer order. Zero percent offers collapse the formula to principal divided by months, which is the cheapest possible path when you qualify.
Worked example
Example: $25,000 at 7% for 5 years
Financed 25,000, APR 7%, term 5 years means 60 payments.
- Monthly rate: 0.07 / 12 = 0.00583333.
- Growth factor: (1.00583333)^60 = 1.4176.
- Monthly payment: 25,000 x 0.00583333 x 1.4176 / 0.4176 = $495.03.
- Lifetime total: 495.03 x 60 = $29,701.80.
- Lifetime interest: 29,701.80 - 25,000 = $4,701.80.
Reference table
| Term | Monthly payment | Lifetime interest |
|---|---|---|
| 3 years (36 mo) | $771.93 | $2,789.39 |
| 5 years (60 mo) | $495.03 | $4,701.80 |
| 7 years (84 mo) | $377.32 | $6,694.63 |
Limits
- Fixed rate assumed. Variable and balloon loans differ.
- Ignores tax, title, insurance, and fees unless rolled in.
- Rebates versus low APR need side by side math.
- Trade values move with the market.
Common mistakes
- Shopping the monthly payment alone while the term quietly stretches to seven years.
- Rolling negative equity from the old car into the new loan without noticing.
- Skipping preapproval, which hands the rate negotiation to the dealer desk.
- Ignoring insurance jumps. Lenders require full coverage, priced on the new car.
- Focusing on sticker discount while fees and add-ons refill the financed amount.
Try it yourself
Quick checks. Answers sit tucked under each question.
Monthly on $20,000 at 6% for 4 years?
r = 0.005, n = 48. M = $469.70.
Zero percent $18,000 over 3 years?
18,000 / 36 = $500 a month.
Questions
What car loan term is best?
Five years or less suits most buyers: payments stay sane and interest stays bounded. Longer terms help cash flow but cost thousands more.
Does a bigger down payment lower the rate?
Sometimes, since the lender risk falls. It always lowers the payment and total interest by shrinking the financed amount.
Should I take 0% APR for a longer term?
Often yes if you qualify without losing a cash rebate. Compare the rebate plus bank loan against 0% plus full price.
What is negative equity?
Owing more than the car value. Long terms and small down payments cause it; gap insurance covers the gap after a total loss.
Can I pay extra each month?
Yes. Extra goes to principal and shortens the loan. Confirm there is no prepayment penalty first.