A car loan looks simple on the dealer's screen — one monthly number — but that number is the end of a chain of choices: the price you negotiate, the taxes and fees added on top, what you put down, what your old car is worth, the interest rate and the length of the loan. Change any one link and the payment moves. This auto loan calculator lays the chain out so you can see each piece. Enter the numbers you have, and it returns the amount you would finance, the monthly payment, the total interest, how large the loan is compared with the car's price, and what an extra monthly payment would do to the payoff date.
How to use the auto loan calculator
- Enter the vehicle price and the sales tax rate for where you register the car, plus title, registration and dealer fees.
- Enter your down payment and trade-in. If you still owe money on the trade-in, enter the balance; any amount above the trade-in value is added to the new loan.
- Enter the APR and the term in months. Use the APR from a written offer, not just the advertised rate.
- Optionally add an extra monthly payment to see how many months and how much interest you would save.
Auto loan formula
Monthly payment P = F × r ÷ (1 − (1 + r)−n), r = APR ÷ 1200, n = months
Total interest = P × n − F
Loan-to-value = F ÷ price × 100
This is the standard amortization formula for a fixed-rate installment loan. At 0% APR the payment is simply F ÷ n. With an extra payment, the calculator steps through the loan one month at a time: interest for the month is balance × r, the payment is the regular payment plus the extra, and the last payment is capped at what is left.
Worked example
You buy a $30,000 car with 6% sales tax, $500 in fees and $3,000 down, on a 60-month loan at 6% APR.
- Tax: 30,000 × 0.06 = $1,800, so the total cost is 30,000 + 1,800 + 500 = $32,300.
- Subtract the down payment: amount financed = $29,300.00.
- Monthly rate r = 0.005. Payment = $566.45.
- Total paid $33,987.07, so interest is $4,687.07.
- Loan-to-value is 97.7% of the sticker price, because taxes and fees were financed.
- Adding $100 a month clears the loan in 50 months and cuts interest to $3,869.84.
Payment by amount financed and term
Monthly payment at 6% APR, computed with the formula above.
| Amount financed | 36 months | 48 months | 60 months | 72 months | 84 months |
|---|---|---|---|---|---|
| $15,000 | $456.33 | $352.28 | $289.99 | $248.59 | $219.13 |
| $25,000 | $760.55 | $587.13 | $483.32 | $414.32 | $365.21 |
| $35,000 | $1,064.77 | $821.98 | $676.65 | $580.05 | $511.30 |
| $45,000 | $1,368.99 | $1,056.83 | $869.98 | $745.78 | $657.38 |
What the interest rate does to a $30,000 loan
Same amount, two terms, six rates. Interest is the total paid minus $30,000.
| APR | 60-month payment | 60-month interest | 72-month payment | 72-month interest |
|---|---|---|---|---|
| 0% | $500.00 | $0.00 | $416.67 | $0.00 |
| 3% | $539.06 | $2,343.64 | $455.81 | $2,818.34 |
| 5% | $566.14 | $3,968.22 | $483.15 | $4,786.65 |
| 7% | $594.04 | $5,642.16 | $511.47 | $6,825.85 |
| 9% | $622.75 | $7,365.04 | $540.77 | $8,935.16 |
| 12% | $667.33 | $10,040.01 | $586.51 | $12,228.42 |
Choosing a term
A longer term lowers the payment but raises the interest, and it keeps you owing more than the car is worth for longer, because the car loses value faster than a long loan pays down. A shorter term does the opposite. Compare terms by total interest as well as monthly payment, and check how much room the payment leaves in your budget with the car affordability calculator. If you already have a loan and are thinking about a lower rate, try the car refinance calculator.
Things the calculator does not include
- Insurance, fuel and maintenance — these are separate monthly costs.
- Add-ons such as extended warranties or gap cover, if you finance them; add their cost to the fees box.
- Daily-interest and precomputed loans. Most U.S. auto loans accrue interest on the daily balance, which matches the monthly formula closely; some lenders use other methods, so read your contract.
Frequently asked questions
How is a car loan payment calculated?
The lender spreads the amount financed over the term with interest on the remaining balance. The payment is F × r ÷ (1 − (1 + r)^−n), where r is the APR divided by 12 and n is the number of months. On $29,300 at 6% for 60 months that is $566.45 a month.
Does the down payment lower my monthly payment?
Yes. Every dollar paid up front is a dollar you do not borrow, so the payment and the total interest both fall. A larger down payment also lowers the loan-to-value ratio, which can help you get approved at a better rate and protects you from owing more than the car is worth.
What happens to the money I still owe on my trade-in?
If the trade-in is worth less than the balance on its loan, the shortfall (negative equity) is usually added to the new loan. Enter the trade-in value and the amount owed, and the calculator adds the difference to the amount financed.
How much does an extra monthly payment save?
Extra money goes straight to principal, so the balance falls faster and less interest accrues. The calculator simulates the loan month by month and reports the months to payoff and the interest saved. Confirm with your lender that extra payments are applied to principal and carry no prepayment penalty.
Is sales tax always charged on the full price?
No. Some states reduce the taxable price by the trade-in value, and some count rebates differently. This calculator applies the rate to the vehicle price. If your state credits the trade-in, enter an effective rate or reduce the price accordingly; see Car Sales Tax Calculator for state rules.