Calculate My Auto Loan

How to Use This Calculator

This auto loan calculator helps you determine your monthly payments, total interest paid, and total cost of your auto loan. Simply enter the loan amount, interest rate, and loan term, then click "Calculate" to see your results.

You can also compare different loan options by adjusting the inputs and recalculating. The calculator shows you how changes in interest rates or loan terms affect your monthly payments and total cost.

Formula Used

The calculator uses the standard auto 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 months)

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 a $25,000 auto loan with a 4.5% annual interest rate over 5 years (60 months):

Input	Value
Loan Amount	$25,000
Annual Interest Rate	4.5%
Loan Term	60 months

Using the formula:

Monthly interest rate = 4.5% / 12 = 0.00375 M = $25,000 [ 0.00375(1 + 0.00375)^60 ] / [ (1 + 0.00375)^60 - 1 ] M ≈ $452.38

The monthly payment would be approximately $452.38. Over 60 months, you would pay a total of $27,142.80, with $2,142.80 going to interest.

Frequently Asked Questions

What is the difference between APR and interest rate?: APR (Annual Percentage Rate) is the total annual cost of borrowing, including fees and other charges, while the interest rate is the cost of borrowing without these additional costs.
How does a longer loan term affect my payments?: A longer loan term typically results in lower monthly payments but more total interest paid over the life of the loan.
Can I pay extra toward my loan without penalty?: Many auto loans allow you to make extra payments without penalty, which can help you pay off the loan faster and save on interest.
What happens if I miss a payment?: Missing a payment can result in late fees, higher interest charges, and potentially damage your credit score. It's important to make payments on time to avoid these consequences.
Can I refinance my auto loan?: Yes, refinancing your auto loan can help you secure a lower interest rate, lower monthly payments, or pay off the loan faster. However, there may be fees and closing costs associated with refinancing.