Auto Loan Calculator

Calculate car payments, total interest, and amortization schedule. Compare loan options and determine affordability.

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Please enter a valid vehicle price (minimum $1,000)
The total price of the vehicle before any discounts
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Down payment cannot exceed vehicle price
Amount you plan to pay upfront
Down Payment Percentage 20%
Recommended: 20% or more to avoid negative equity
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Trade-in value cannot exceed vehicle price
Value of your current vehicle if trading in
%
Sales tax rate must be between 0% and 20%
Your local sales tax rate for vehicle purchases
%
Interest rate must be between 0% and 30%
Annual Percentage Rate (APR) for your auto loan
Loan term must be between 12 and 120 months
Length of the loan in months (typically 36-72 months)
3 Years (36 mo)
4 Years (48 mo)
5 Years (60 mo)
6 Years (72 mo)
7 Years (84 mo)

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Calculating...

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Understanding Auto Loans

An auto loan is a type of personal loan used to purchase a vehicle. The loan is secured by the vehicle itself, which means the lender can repossess the car if you fail to make payments.

Key Auto Loan Terms:

  • Principal: The amount borrowed to purchase the vehicle
  • Interest Rate (APR): Annual percentage rate charged on the loan
  • Loan Term: Length of time to repay the loan (typically 36-72 months)
  • Amortization: Process of paying off debt with regular payments over time
  • Down Payment: Initial payment made when purchasing the vehicle

How Auto Loan Payments Are Calculated

Auto loan payments are typically calculated using the following formula for a fixed-rate loan:

Monthly Payment Formula

M = P × [r(1+r)ⁿ] / [(1+r)ⁿ - 1]

Where:
M = Monthly payment
P = Principal loan amount
r = Monthly interest rate (annual rate ÷ 12)
n = Total number of payments (loan term in months)

Tips for Getting the Best Auto Loan

1

Check Your Credit Score: Higher scores qualify for lower interest rates. Aim for a score of 720 or above for the best rates.

2

Make a Larger Down Payment: Putting down at least 20% can help you avoid being "upside down" on your loan (owing more than the car is worth).

3

Shop Around for Rates: Get pre-approved from multiple lenders including banks, credit unions, and online lenders before visiting dealerships.

4

Consider Loan Term Carefully: Shorter terms (36-48 months) mean higher monthly payments but less total interest paid over the life of the loan.

Average Auto Loan Rates by Credit Score

Credit Score Range Credit Tier Average New Car APR Average Used Car APR
781-850 Super Prime 5.07% 5.32%
661-780 Prime 6.44% 7.54%
601-660 Nonprime 9.06% 11.26%
501-600 Subprime 11.53% 14.08%
300-500 Deep Subprime 14.18% 16.41%

Frequently Asked Questions

The interest rate is the cost of borrowing the principal loan amount, while APR (Annual Percentage Rate) includes the interest rate plus any additional fees or costs associated with the loan. APR gives you a more complete picture of the loan's total cost.

It depends on your credit situation and preferences. Credit unions often offer the lowest rates for members. Banks provide convenience and may offer relationship discounts. Dealership financing can be convenient and sometimes offer promotional rates, but may have higher rates for those with lower credit scores. Get pre-approved from multiple sources to compare.

Financial experts typically recommend at least 20% down for new cars and 10% for used cars. A larger down payment reduces your monthly payment, total interest paid, and helps you avoid being "upside down" on your loan (owing more than the car is worth).

Shorter loan terms (36-48 months) typically have lower interest rates and cost less in total interest, but have higher monthly payments. Longer terms (72-84 months) have lower monthly payments but higher total interest costs and increase the risk of being upside down on your loan. The best choice depends on your budget and financial goals.

An amortization schedule is a table that shows the breakdown of each loan payment into principal and interest portions, along with the remaining balance after each payment. In the early years of an auto loan, a larger portion of each payment goes toward interest; as the loan progresses, more goes toward reducing the principal.