Personal Finance
Car Loan Calculator
Dealers sell monthly payments; smart buyers shop total cost. See both before you sign.
A car-loan payment uses the amortization formula with the loan amount, annual rate, and term in months. Total interest is all payments minus the loan. Longer terms lower payments but raise total interest paid. Figures are estimates before taxes and fees — verify details with a licensed advisor where needed.
Payment = amortization formula.
72–84 month terms inflate total interest.
Aim: 20% down, ≤4-year term.
Calculate Your Car Loan
Monthly Payment
What Is Car Loan?
Auto loans amortize like mortgages but on shorter timelines. The payment depends on the amount financed (price minus down payment), the APR, and the term.
Terms keep stretching, 72 and 84 months are common, which lowers payments but inflates total interest and keeps buyers underwater longer.
How It Is Calculated
PMT = L × r(1+r)^n ÷ ((1+r)^n − 1), r = APR/12
Example: Example: $28,000 car, $5,000 down, 6.9% for 60 months → ≈ $454/month; ≈ $4,265 total interest
Same $23,000 loan at 6.9%
| Term | Payment | Total interest |
|---|---|---|
| 48 months | $550 | $3,400 |
| 60 months | $454 | $4,265 |
| 72 months | $391 | $5,150 |
| 84 months | $346 | $6,060 |
Limitations
- Dealer financing often bundles fees, compare the APR, not the payment.
- Sales tax, registration, and add-ons raise the financed amount.
- Early payoff saves interest only if there's no prepayment penalty.
Sources & Review
References used for this calculator’s formulas and thresholds:
Car Loan FAQ
What is the 20/4/10 rule for car buying?
20% down, 4-year max term, payment ≤ 10% of gross income, the anti-upside-down formula.
Is a 72-month car loan a bad idea?
Usually, it lowers the payment but adds ~$1,000+ in interest per $23k borrowed and risks being underwater for years.
Should I put more money down?
Yes, cars depreciate ~20% in year one. A bigger down payment prevents owing more than the car is worth.
Can I refinance a car loan?
Usually, especially if your credit improved or rates fell, savings of 1–2% APR are meaningful on $20k+.
A note before you begin: this tool offers educational estimates only. It cannot replace advice from a qualified professional.