Ally Auto Calculator

How to Use This Calculator

To use this calculator effectively:

1. Enter your current loan amount in the "Loan Amount" field.
2. Select your current interest rate from the dropdown menu.
3. Enter the loan term in years.
4. If you're considering refinancing, enter the new interest rate and term.
5. Click "Calculate" to see your estimated monthly payments and savings.

The calculator will show you:

• Your current monthly payment
• Total interest paid over the life of the loan
• Your new monthly payment if refinancing
• Potential savings from refinancing

Formula Used

The calculator uses the standard auto loan payment formula:

Total interest paid is calculated by multiplying the monthly payment by the number of payments and subtracting the original loan amount.

Worked Example

Let's say you have a $20,000 auto loan with a 5% annual interest rate and a 4-year term:

1. Monthly interest rate = 5% ÷ 12 = 0.4167%
2. Number of payments = 4 × 12 = 48
3. Monthly payment = $20,000 × (0.004167(1 + 0.004167)^48) / ((1 + 0.004167)^48 - 1) ≈ $472.88
4. Total interest paid = ($472.88 × 48) - $20,000 ≈ $1,303.04

If you refinance to a 3.5% rate with the same term:

1. New monthly interest rate = 3.5% ÷ 12 ≈ 0.2917%
2. New monthly payment ≈ $430.35
3. Potential savings = $472.88 - $430.35 = $42.53 per month
4. Total savings over 4 years ≈ $42.53 × 48 ≈ $2,041.44