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Empower Auto Loan Calculator

Reviewed by Calculator Editorial Team

This Empower Auto Loan Calculator helps you determine your monthly payments, total interest, and loan cost for an auto loan. Simply enter your loan amount, interest rate, and loan term to get an accurate calculation.

How to Use This Calculator

Using the Empower Auto Loan Calculator is simple:

  1. Enter the loan amount you're requesting in the "Loan Amount" field.
  2. Input the annual interest rate offered by the lender in the "Interest Rate" field.
  3. Specify the loan term in years in the "Loan Term" field.
  4. 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 calculator uses the standard auto loan payment formula:

Monthly Payment (PMT) = P × [r(1 + r)^n] / [(1 + r)^n - 1]

Where:

  • P = Principal loan amount
  • r = Monthly interest rate (annual rate divided by 12)
  • n = Number of payments (loan term in years multiplied by 12)

Total interest is calculated by subtracting the original loan amount from the total cost of the loan.

Worked Example

Let's calculate a loan with these parameters:

  • Loan Amount: $25,000
  • Interest Rate: 5% (0.05)
  • Loan Term: 5 years

Monthly interest rate = 0.05 / 12 = 0.0041667

Number of payments = 5 × 12 = 60

Monthly Payment = 25000 × [0.0041667(1 + 0.0041667)^60] / [(1 + 0.0041667)^60 - 1]

Calculating this gives a monthly payment of approximately $462.87.

Total interest paid over 5 years would be approximately $3,765.40, making the total cost of the loan $28,765.40.

Frequently Asked Questions

What is the difference between APR and interest rate?
APR (Annual Percentage Rate) is the annual interest rate charged for borrowing, while the interest rate is the actual rate used to calculate payments. APR includes additional fees and costs.
How does a longer loan term affect my payments?
A longer loan term typically results in lower monthly payments but higher total interest paid over the life of the loan. Shorter terms usually mean higher payments but less total interest.
Can I pay extra toward my loan without penalty?
Yes, most lenders allow prepayment of loans without penalty. Paying extra can reduce your total interest and pay off the loan faster.