Bank Rate.com Auto Loan Calculator
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Reviewed by Calculator Editorial Team
Calculate your auto loan payments with our Bank Rate.com Auto Loan Calculator. Simply enter your loan amount, interest rate, and loan term to get your monthly payment, total interest, and total cost of the loan.
How to Use This Calculator
Using our Bank Rate.com Auto Loan Calculator is simple:
- Enter the loan amount you want to borrow in the "Loan Amount" field.
- Enter the annual interest rate offered by the lender in the "Interest Rate" field.
- Select the loan term (in years) from the dropdown menu.
- Click the "Calculate" button to see your monthly payment, total interest, and total cost of the loan.
The calculator will display your monthly payment, total interest paid over the life of the loan, and the total cost of the loan including principal and interest.
Formula Used
The monthly payment for an auto loan is calculated using the standard loan payment formula:
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 the loan over the specified term.
Worked Example
Let's calculate the monthly payment for a $25,000 auto loan with a 4.5% annual interest rate over 5 years.
Example Calculation
Principal (P) = $25,000
Annual Interest Rate = 4.5%
Monthly Interest Rate (i) = 4.5% / 12 = 0.375% or 0.00375
Loan Term (n) = 5 years × 12 = 60 months
Monthly Payment (M) = $25,000 [ 0.00375(1 + 0.00375)^60 ] / [ (1 + 0.00375)^60 - 1 ]
Monthly Payment = $25,000 [ 0.00375 × 1.2314 ] / [ 1.2314 - 1 ]
Monthly Payment = $25,000 [ 0.00464 ] / 0.2314
Monthly Payment = $25,000 × 0.01999 ≈ $499.75
Using our calculator, you would enter $25,000 for the loan amount, 4.5 for the interest rate, and select 5 years for the loan term. The calculator would then display a monthly payment of approximately $499.75, total interest of $1,975, and a total cost of $26,975.
FAQ
An auto loan calculator is a tool that helps you estimate your monthly car payment based on the loan amount, interest rate, and loan term. It uses the standard loan payment formula to calculate the fixed monthly payment required to pay off the loan.
This calculator provides an estimate of your monthly car payment. The actual payment may vary slightly depending on the lender's specific calculation method and any additional fees or charges.
Yes, you can use this calculator to estimate your monthly payment if you're considering refinancing your auto loan. Simply enter the new loan amount, interest rate, and loan term to see the potential savings.