Auto Loan Calculator Bankrate Com
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Reviewed by Calculator Editorial Team
This auto loan calculator helps you estimate your monthly payments, total interest, and loan affordability. Enter your loan amount, interest rate, and loan term to get an instant calculation. Compare different loan scenarios to make informed decisions before applying for financing.
How to Use This Calculator
Using this auto loan calculator is simple:
- Enter the loan amount you're considering in the "Loan Amount" field.
- Input the annual interest rate offered by the lender.
- Select the loan term in years from the dropdown menu.
- Click "Calculate" to see your estimated monthly payment and other details.
- Use the "Reset" button to clear all fields and start over.
The calculator will display your estimated monthly payment, total interest paid over the life of the loan, and the total amount paid (principal + interest).
Formula Used
The auto loan calculator uses the standard mortgage payment formula:
Monthly 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 calculate an example auto loan:
Example Calculation
Loan Amount: $25,000
Annual Interest Rate: 5.5%
Loan Term: 5 years
Monthly Payment: $454.23
Total Interest: $1,711.14
Total Amount Paid: $26,711.14
This example shows that borrowing $25,000 at 5.5% interest for 5 years would result in monthly payments of $454.23, with a total interest cost of $1,711.14.
Frequently Asked Questions
How accurate is this auto loan calculator?
This calculator provides an estimate based on the information you provide. Actual loan terms may vary depending on the lender's specific conditions and your creditworthiness.
Can I use this calculator for refinancing?
Yes, you can use this calculator to estimate your new monthly payments if you're considering refinancing your auto loan. Simply enter your new loan terms and compare the results.
What factors affect my auto loan payment?
Your monthly payment is primarily determined by the loan amount, interest rate, and loan term. Other factors that may affect your payment include down payments, trade-in values, and any fees associated with the loan.