Free Auto Loan Calculator Bankrate
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Reviewed by Calculator Editorial Team
This free auto loan calculator helps you estimate your monthly payments, total interest costs, and loan breakdown. Simply enter your loan amount, interest rate, and loan term to get instant results.
How to Use This Calculator
Using our auto loan calculator is simple:
- Enter the loan amount you're considering
- Input the annual interest rate (APR)
- Select the loan term in years
- Click "Calculate" to see your results
The calculator will show you your estimated monthly payment, total interest paid over the life of the loan, and a breakdown of principal vs. interest payments.
Formula Explained
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 (APR/12)
- n = Number of payments (loan term in years × 12)
This formula calculates the fixed monthly payment required to pay off the loan in the specified term, including both principal and interest.
Worked Example
Let's calculate a $25,000 loan at 4.5% APR for 5 years:
- Monthly interest rate = 4.5% ÷ 12 = 0.375% or 0.00375
- Number of payments = 5 × 12 = 60
- Monthly payment = $25,000 [ 0.00375(1 + 0.00375)60 ] / [ (1 + 0.00375)60 - 1 ] ≈ $454.24
- Total interest paid = ($454.24 × 60) - $25,000 ≈ $1,634.40
This example shows you would pay approximately $454.24 per month with $1,634.40 in total interest over the life of the loan.
Interpreting Results
When you get your auto loan calculation results, pay attention to these key points:
- Monthly payment: This is your fixed payment amount each month
- Total interest: This shows how much you'll pay in interest over the loan term
- Amortization schedule: This chart shows how your payments are divided between principal and interest over time
Important Note
These calculations are estimates based on the information you provide. Actual loan terms may vary depending on your lender and specific loan agreement.
FAQ
What is the difference between APR and interest rate?
The APR (Annual Percentage Rate) is the total cost of credit including all fees and charges, while the interest rate is just the cost of borrowing. APR is always higher than the interest rate.
How do I find my loan term?
Your loan term is typically the length of time you want to pay off the loan, usually between 3-7 years for auto loans. Check with your lender for available terms.
Can I pay extra toward my loan?
Yes, paying extra principal can reduce your total interest costs and pay off your loan faster. Our calculator can show you the impact of extra payments.
What if I want to refinance?
Refinancing can lower your interest rate and monthly payments. Use our calculator to compare different scenarios and see the potential savings.