Monthly Payment $548.23
Loan Amount $28,000
Total Interest $4,894
Total Cost $39,894
Down Payment % 20%
Car Loan Calculator
Calculate your monthly car payment and total loan cost. Enter the vehicle price, down payment, interest rate, and loan term.
How Car Loan Calculations Work
Car loans use the same amortization formula as other installment loans. Your monthly payment is calculated based on:
- Loan Amount = Vehicle Price - Down Payment - Trade-in Value
- Monthly Payment = P × [r(1+r)^n] / [(1+r)^n - 1]
- Where P = principal, r = monthly interest rate, n = number of payments
A larger down payment reduces both your monthly payment and total interest paid.
Example Calculation
For a $35,000 car with $7,000 down (20%), 6.5% APR, and 60-month term:
- Loan amount: $28,000
- Monthly payment: $548.23
- Total interest: $4,894
- Total cost: $39,894
FAQ
- What is a good interest rate for a car loan?
- Interest rates vary based on credit score, loan term, and whether the car is new or used. Good rates typically range from 3-7% for new cars and 5-10% for used cars with good credit.
- How much should I put down on a car?
- Financial experts recommend putting down at least 20% on a new car and 10% on a used car to avoid being "underwater" on your loan and reduce interest costs.
- What loan term should I choose?
- Shorter terms (36-48 months) have higher payments but lower total cost. Longer terms (60-72 months) have lower payments but you pay more interest overall.
- Should I include trade-in value?
- Yes, your trade-in reduces the loan amount. Enter the trade-in value to see how it affects your monthly payment and total cost.