Monthly Payment Calculator for Auto Loan

How to Use This Calculator

Using our monthly payment calculator for auto loan is simple:

1. Enter the loan amount you're applying for in the first field.
2. Input your annual interest rate in the second field.
3. Select the loan term in years from the dropdown menu.
4. Click the "Calculate" button to see your estimated monthly payment.

The calculator will display your monthly payment, total interest paid, and total amount paid over the life of the loan.

Formula Used

The monthly payment for an auto loan is calculated using the standard loan payment formula:

This formula accounts for the interest on the loan balance each month, which is why the monthly payment is higher than simply dividing the loan amount by the number of payments.

Worked Example

Let's calculate a monthly payment for a $20,000 auto loan with a 4.5% annual interest rate and a 5-year term.

1. Convert the annual interest rate to a monthly rate: 4.5% ÷ 12 = 0.375% or 0.00375 in decimal form.
2. Calculate the number of payments: 5 years × 12 = 60 payments.
3. Plug the values into the formula:
   M = 20000 [ 0.00375(1 + 0.00375)^60 ] / [ (1 + 0.00375)^60 - 1 ]
4. The calculation yields a monthly payment of approximately $389.84.

Over the 5-year term, you would pay a total of $23,390.40, with $3,390.40 going toward interest.