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Auto Loan Calculator Interest

Reviewed by Calculator Editorial Team

Calculate your auto loan interest payments with our free online calculator. Get monthly payments, total interest, and amortization schedule.

How to Use This Calculator

To calculate your auto loan interest payments:

  1. Enter the loan amount in dollars
  2. Enter the annual interest rate (APR)
  3. Select the loan term in years
  4. Click "Calculate" to see your monthly payment and total interest

The calculator will show you:

  • Your monthly payment amount
  • Total interest paid over the life of the loan
  • A breakdown of principal and interest payments
  • A chart showing the amortization schedule

Formula Used

The monthly payment for an auto loan is calculated using 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 (APR/12/100)
  • n = number of payments (loan term in years × 12)

Total interest paid is calculated as:

Total Interest = (Monthly Payment × Number of Payments) - Principal Loan Amount

Worked Example

Let's calculate the monthly payment for a $25,000 auto loan with a 5.5% APR over 5 years:

  1. Principal (P) = $25,000
  2. Annual Interest Rate = 5.5%
  3. Monthly Interest Rate (i) = 5.5% ÷ 12 ÷ 100 = 0.004583
  4. Number of Payments (n) = 5 × 12 = 60
  5. Monthly Payment (M) = $25,000 [ 0.004583(1 + 0.004583)60 ] / [ (1 + 0.004583)60 - 1 ] ≈ $476.64
  6. Total Interest Paid = ($476.64 × 60) - $25,000 ≈ $1,338.40

So for this loan, you would pay approximately $476.64 per month with a total interest of $1,338.40.

Frequently Asked Questions

What is the difference between APR and APY?
APR (Annual Percentage Rate) is the simple annual interest rate, while APY (Annual Percentage Yield) includes compounding interest and is typically higher than APR.
How does loan term affect my monthly payment?
A longer loan term means lower monthly payments but more total interest paid, while a shorter term means higher monthly payments but less total interest.
What is the difference between fixed and variable interest rates?
A fixed rate stays the same throughout the loan term, while a variable rate can change based on market conditions, which can affect your monthly payments.
How can I lower my auto loan interest rate?
You can improve your credit score, shop around for lenders, and consider refinancing if your credit improves or interest rates decrease.
What happens if I make extra payments on my auto loan?
Extra payments will reduce the principal balance faster, lower your total interest, and potentially shorten the loan term.