US Bankrate Auto Loan Calculator
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Reviewed by Calculator Editorial Team
This US Bankrate Auto Loan Calculator helps you estimate your monthly car payment, total interest paid, and loan cost. Simply enter your loan amount, interest rate, and loan term to get an instant calculation.
How to Use This Calculator
Using this auto loan calculator is simple:
- Enter the loan amount you're requesting (e.g., $25,000)
- Input your annual interest rate (e.g., 4.5%)
- Select your loan term in years (e.g., 5 years)
- Click "Calculate" to see your monthly payment
The calculator will display your estimated monthly payment, total interest paid over the life of the loan, and the total cost of the loan.
Formula Used
The auto loan payment is calculated using the standard loan payment formula:
Monthly Payment = P × (r(1 + r)n) / ((1 + r)n - 1)
Where:
- P = Principal loan amount
- r = Monthly interest rate (annual rate ÷ 12)
- n = Number of payments (loan term in years × 12)
This formula accounts for the interest you'll pay over the life of the loan, providing an accurate estimate of your monthly obligation.
Worked Example
Let's calculate a monthly payment for a $20,000 loan at 5% annual interest over 4 years:
- Principal (P) = $20,000
- Annual interest rate = 5% (0.05)
- Monthly interest rate (r) = 0.05 ÷ 12 ≈ 0.004167
- Number of payments (n) = 4 × 12 = 48
Monthly Payment = $20,000 × (0.004167(1 + 0.004167)48) / ((1 + 0.004167)48 - 1)
≈ $20,000 × (0.004167 × 1.2194) / (1.2194 - 1)
≈ $20,000 × 0.0506 / 0.2194
≈ $20,000 × 0.2306
≈ $4,612.00
Your estimated monthly payment would be $4,612.00.
FAQ
What is the difference between APR and interest rate?
The interest rate is the cost of borrowing, while APR (Annual Percentage Rate) includes additional fees and costs. APR is always higher than the interest rate.
How does a longer loan term affect my payment?
A longer loan term means lower monthly payments but more total interest paid. A shorter term means higher monthly payments but less total interest.
What's the best interest rate for an auto loan?
The best rate depends on your credit score and market conditions. Generally, rates below 4% are considered good, while rates above 7% may indicate a need for refinancing.
Can I pay extra toward my auto loan?
Yes, paying extra principal can reduce your interest costs and pay off the loan faster. Many lenders allow prepayment without penalty.