Auto Loan Calculator

Use this calculator to estimate your monthly car loan payment based on your loan amount, interest rate, term, and down payment. It also provides a full amortization schedule and shows the total cost over time.

How does an auto loan work?

When you buy a car using financing, you are agreeing to borrow a certain amount and repay it over time, usually in monthly installments. You will pay interest on top of the loan amount (which is called the principal), and the total cost will depend on your rate and loan term.

Key terms you should know

• Loan Amount: This is the amount you are borrowing — typically the car price minus your down payment.
• Interest Rate (APR): The annual percentage you are charged by the lender. Higher rates lead to more interest paid over time.
• Loan Term: The duration of your loan, usually 3 to 7 years. Longer terms lower your monthly payment but increase total interest.
• Down Payment: The amount you pay upfront. A higher down payment reduces the loan amount and interest.
• Trade-In Value: The value of your old car that you’re trading in. This amount reduces your loan.
• Cash Rebate / Incentives: Manufacturer or dealer discounts that reduce your total vehicle cost. This is subtracted before calculating your loan.
• Insurance Premium: Auto insurance is mandatory and protects against potential losses. Lenders often require full coverage, especially for new cars. Insurance premiums can be paid separately or included in the loan amount.
• Sales Tax: State or local tax added to the vehicle price. This is added back to the loan unless you pay it upfront.
• Loan Fees: Origination fees or processing fees charged by your lender. These are included in your total loan amount.

How does Auto Loan interest work?

Most auto loans use simple interest. That means your interest is calculated on the remaining loan balance, not the original amount for the whole term.

Early in the loan, your payments go mostly toward interest. Over time, more of your monthly payment goes toward the principal. You can view this shift in the amortization schedule shown below your results.

Optional Fees and Costs

Auto loans often come with additional fees that are not part of the car price but still affect the total cost:

Car Loan Formula

The monthly payment is calculated using the standard amortized loan formula:

Monthly Payment = [P × r × (1 + r)ⁿ] ÷ [(1 + r)ⁿ – 1]

Where:

• P = loan amount
• r = monthly interest rate (annual rate ÷ 12 ÷ 100)
• n = total number of payments (loan term in months)

As an example if you are buying a new car priced at $30,000. You make a down payment of $5,000, and the sales tax is 8%, which adds $2,400. You also pay $500 for registration and title fees. You plan to finance the rest through a 5-year auto loan at an interest rate of 6.5%.

Here’s how it breaks down:

• Your total loan amount is: $30,000 - $5,000 + $2,400 + $500 = $27,900
• Based on the loan term of 60 months, and using standard loan formulas, your monthly payment would come out to approximately $547.
• Over 5 years, your total repayment would be around $35,900.
• Out of this, the interest paid would be roughly $5,900.

What this calculator helps you find

• Your monthly EMI (Equated Monthly Installment)
• The total interest you will pay over the life of the loan
• The full repayment amount
• A complete amortization table, month by month

Can i use this for used cars?

Yes. This auto loan calculator works whether you’re financing a new or used vehicle. You can also use it for motorcycles, RVs, and other types of auto loans.