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Auto Calculator Car Loan

Reviewed by Calculator Editorial Team

This car loan calculator helps you determine your monthly payments, total interest paid, and the total cost of your auto loan. Simply enter your loan amount, interest rate, and loan term to get an instant calculation.

How to Use This Calculator

Using this car loan calculator is simple:

  1. Enter the loan amount (the total price of the vehicle).
  2. Enter the interest rate (the annual percentage rate).
  3. Enter the loan term (the length of the loan in years).
  4. Click the Calculate button to see your results.

The calculator will display your monthly payment, total interest paid, and the total cost of the loan. You can also view a breakdown of your loan payments in the chart below the calculator.

Formula Explained

The car loan calculator uses the standard loan payment formula:

M = P [ i(1 + i)^n ] / [ (1 + i)^n - 1 ] Where: M = Monthly payment P = Principal loan amount i = Monthly interest rate (annual rate divided by 12) n = Number of payments (loan term in years multiplied by 12)

This formula calculates the fixed monthly payment required to pay off a loan with a fixed interest rate over a specified period.

Worked Example

Let's say you're financing a car with these details:

  • Loan amount: $25,000
  • Interest rate: 5% (0.05)
  • Loan term: 5 years (60 months)

Using the formula:

i = 0.05 / 12 = 0.0041667 n = 5 * 12 = 60 M = 25000 [ 0.0041667(1 + 0.0041667)^60 ] / [ (1 + 0.0041667)^60 - 1 ] M ≈ $456.23

Your monthly payment would be approximately $456.23. Over the 5-year term, you would pay a total of $27,377.80, with $2,377.80 going toward interest.

Frequently Asked Questions

What is the difference between APR and interest rate?
APR (Annual Percentage Rate) is the cost of credit expressed as a yearly percentage, while the interest rate is the actual percentage charged on your loan. APR includes additional fees and costs, making it a more accurate representation of the true cost of borrowing.
How does a longer loan term affect my monthly payments?
A longer loan term typically results in lower monthly payments but also means you'll pay more in total interest over the life of the loan. A shorter term means higher monthly payments but less total interest paid.
Can I pay extra toward my loan without penalty?
Many lenders allow you to make extra payments without penalty. Paying extra can reduce your principal balance faster and save you money on interest. Check with your lender for specific policies.