Www Bankrate Com Auto Calculator
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Reviewed by Calculator Editorial Team
This auto loan calculator helps you determine monthly payments, total interest, and loan affordability. Simply enter your loan amount, interest rate, and term to get instant results. The calculator also provides a payment breakdown chart to visualize your loan repayment schedule.
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 display your monthly payment, total interest paid, and total cost of the loan. You can also view a chart showing your payment breakdown over time.
Formula Explained
The auto loan calculator uses the standard amortization formula to calculate monthly payments:
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 (annual rate divided by 12)
- n = Number of payments (loan term in years multiplied by 12)
This formula accounts for both the principal and interest portions of each payment, providing an accurate representation of your monthly obligations.
Worked Example
Let's calculate a $25,000 loan at 4.5% APR for 5 years:
- Convert annual rate to monthly: 4.5% ÷ 12 = 0.375% or 0.00375
- Calculate number of payments: 5 years × 12 = 60 payments
- Apply the formula:
M = $25,000 [0.00375(1 + 0.00375)^60] / [(1 + 0.00375)^60 - 1]
M ≈ $452.34
Your monthly payment would be approximately $452.34, with a total interest of $3,622.20 and total cost of $28,622.20.
Loan Comparison Table
Compare different loan options to find the best deal:
| Loan Amount | Interest Rate | Term | Monthly Payment | Total Interest |
|---|---|---|---|---|
| $20,000 | 3.5% | 4 years | $463.25 | $1,732.60 |
| $20,000 | 4.5% | 4 years | $485.48 | $3,347.68 |
| $20,000 | 3.5% | 5 years | $376.67 | $1,233.33 |
| $20,000 | 4.5% | 5 years | $398.90 | $2,390.00 |
This comparison shows how different interest rates and terms affect your monthly payments and total interest costs.
Frequently Asked Questions
What is the difference between APR and interest rate?
APR (Annual Percentage Rate) is the total annual cost of credit including fees, while the interest rate is the portion of APR that goes to finance charges. 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 have to repay the loan, usually between 2-7 years for auto loans. Check your loan agreement for the exact term.
Can I pay extra toward my loan?
Yes, paying extra principal can reduce your interest costs and pay off your loan faster. The calculator shows how additional payments would affect your loan term.