Auto Loan Calculator: Estimate Your Car Payment

Auto Loan Calculator

Auto Loan Amount

Interest Rate (APR)

Loan Term (Years)

Calculator Results

Monthly Payment
Total Interest Paid
Total Cost of Loan

A auto loan balance with an average interest rate of paid over a year term will have a monthly payment of . In total, the loan will cost with in interest.

More calculators: Refinance car loan calculator & boat loan calculator

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How to use our car payment calculator
Why use a car loan calculator?
How to find an auto lender
FAQ

How to use our car payment calculator

Using a car calculator can help you determine your monthly payment and the total cost of the loan based on different loan amounts, interest rates, and term lengths. This tool is valuable for budgeting and comparing loan offers from various lenders.

To use the car loan payment calculator, follow these steps:

Enter the loan amount.
Enter the interest rate.
Enter the loan term.
Review the estimated monthly payment and total interest cost.

Why use a car loan calculator?

Buying a car can be expensive, and most people can’t afford to pay cash upfront. Consumers who need cars can obtain auto loans through car dealerships, banks, credit unions, and online lenders.

Auto loans are secured loans, with the car acting as collateral. If you fail to make payments, your lender can repossess the vehicle and sell it to recover the money. Because the loans are secured, the interest rate is often lower than other consumer debt types, such as credit cards and personal loans.

Benefits of an auto payment calculator

An auto calculator allows you to see how different factors, such as loan amount, interest rate, and loan term, affect your monthly payments and total loan cost. It helps you make informed decisions about your car financing options

Various factors affect your interest rate, such as whether you’re buying a new or used car, whether you have a trade-in, the amount of your down payment, your credit score and income, and the length of your repayment term. Comparison shopping among lenders is also important for finding the best deal—and an auto loan calculator, car finance calculator, or car payment estimator can help by estimating your monthly payments and total costs of borrowing.

How to find an auto lender

As the auto loan payment calculator shows, the interest rate you pay affects your monthly payments and overall loan costs. Finding the best auto loan is crucial.

Types of auto loans

You should know whether you want a new or used car loan and whether you’ll consider a private-party loan.

New car loans

New car loans typically have lower interest rates than used car loans.

Pros and cons of new car loans

Pros

Lower interest rates

New car loans can offer lower interest rates than used car loans because new vehicles are more valuable and have a lower risk of mechanical issues.
Warranty coverage

New cars come with manufacturer warranties, which can save you money on repairs during the warranty period.
Latest features and technology

Buying a new car means you get the latest safety features, technology, and fuel efficiency.

Cons

Higher depreciation

New cars lose a significant portion of their value within the first few years.
Higher cost

New cars are more expensive than used cars, which means you’ll likely need a larger loan amount and have higher monthly payments.
Higher insurance premiums

Insuring a new car can be more expensive due to its higher value.

Used car loans

Used car loans often come with higher interest rates.

Pros and cons of used car loans

Pros

Lower purchase price

Used cars are generally cheaper than new cars, which means you can borrow less and have lower monthly payments.
Slower depreciation

Used cars depreciate at a slower rate compared to new cars, preserving more of their value over time.
Potentially lower insurance costs

Insurance premiums for used cars tend to be lower due to their reduced value.

Cons

Higher interest rates

Used car loans often come with higher interest rates because lenders consider them a higher risk.
More maintenance and repairs

Older cars are more likely to need repairs and maintenance, which can add to the overall cost of ownership.
Limited warranty

Used cars might not come with a warranty, or the warranty period may be shorter, increasing potential out-of-pocket expenses for repairs.

Private-party loans

Private-party loans are used when buying a car from an individual rather than a dealership. They are available through many lenders, including banks, credit unions, and online lenders.

Pros

Potential for lower prices

Buying from an individual can sometimes be cheaper than buying from a dealership because private sellers might be more willing to negotiate.
No dealer fees

When you buy from a private seller, you avoid the dealer fees typically added to the purchase price at dealerships.
Wide selection

You have a broad selection of vehicles to choose from; you’re not limited to the inventory of a single dealership.

Cons

Higher interest rates

Lenders often charge higher interest rates for private-party loans due to the increased risk associated with buying from an individual.
No warranty

Private sales typically don’t come with warranties, meaning you could be responsible for any immediate repairs or issues with the car.
More limited financing options

Not all lenders offer private-party loans, so you might have fewer financing options.
Potential for scams

Buying from a private seller carries the risk of scams or purchasing a vehicle with undisclosed issues.

How to get the best loan

Here’s what you can do to find the best car loan.

Tips to get the best auto loan rates

Improve your credit score

Improving your credit score is one of the most effective ways to secure a lower interest rate on an auto loan. Here are steps you can take to enhance your credit score:

Pay off debt: Focus on paying down debt, particularly high-interest credit card debt. Reducing your credit card balances can lower your credit utilization ratio, which accounts for 30% of your credit score.
Make on-time payments: Ensure you pay all your bills on time, including credit cards, loans, and utilities. Payment history is the most significant factor in your credit score, accounting for 35%.
Dispute inaccuracies: Check your credit report for errors. If you find any inaccuracies, dispute them with the credit bureaus. Removing incorrect negative marks can boost your score.
Limit new credit applications: Each new credit application results in a hard inquiry, which can lower your score. Apply for new credit only when necessary.
Maintain older accounts: The length of your credit history contributes to your score. Keep older accounts open and active to benefit from a longer credit history.

Shop around

To find the best auto loan rates, comparing offers from multiple lenders is crucial. Here are our tips for shopping around:

Get quotes from various sources: Obtain loan quotes from banks, credit unions, online lenders, and dealerships. Each lender may offer different rates and terms based on your credit profile.
Compare interest rates and terms: Look beyond the interest rate and consider the loan term, fees, and any additional charges. A lower interest rate with high fees may not be the best deal.
Check for prequalification: Many lenders offer prequalification, which allows you to see potential loan terms without a hard credit inquiry. This can help you compare rates without impacting your credit score.
Use comparison tools: Online tools and calculators can help you compare loan offers side by side, making it easier to identify the best option.

Consider shorter loan terms

Choosing a shorter loan term can result in lower interest rates and overall costs even though the monthly payments might be higher. Here’s why:

Lower interest rates: Lenders often offer lower interest rates for shorter loan terms because the loan is paid off faster, reducing their risk.
Less interest paid overall: A shorter loan term means you pay less interest over the life of the loan, saving you money in the long run.
Build equity faster: With a shorter loan term, you pay off the principal faster, building equity in your car sooner.
Avoid long-term depreciation: Cars depreciate quickly, and a shorter loan term reduces the risk of owing more than the car’s value as it depreciates.

Common pitfalls to avoid when taking out an auto loan

Overextending your budget

Taking on a loan that stretches your finances too thin can lead to financial stress and potential default. Here’s how to avoid this pitfall:

Create a budget: Determine how much you can afford to spend on a car payment each month. Include all related expenses, such as insurance, maintenance, and fuel.
Consider total cost: Factor in the total cost of ownership, not just the monthly payment. A lower monthly payment on a longer loan term can end up costing more in the long run.
Avoid upselling: Stick to your budget and avoid being upsold on a more expensive vehicle than you can afford.

Not understanding the loan terms

Fully understanding your loan agreement is crucial to avoid surprises. Here’s what to consider:

Interest rates and APR: Know the difference between the interest rate and the annual percentage rate (APR), which includes fees and other costs.
Fees and penalties: Be aware of any fees, such as origination fees, prepayment penalties, and late payment fees.
Loan term: Understand the length of the loan and how it affects your monthly payment and total interest paid.

Failing to negotiate

Negotiating can save you money on the car price and loan terms. Here’s how to do it:

Negotiate the car price: Focus on getting the best price for the car before discussing financing options.
Shop your financing: Use preapproval offers to negotiate better loan terms with the dealer. If the dealer can’t match or beat your preapproval, consider using the external lender.
Ask about incentives: Dealers often have incentives and rebates available that can lower the car’s price or loan terms.

FAQ

How much will my car payment be?

Monthly payments on car loans are based on multiple factors, so it can be difficult to estimate what you’ll pay each month until you know the price of the car you want to buy and your specific loan terms. However, by entering basic information into the car loan payment calculator above, you can get an idea of what you might end up paying.

How does interest work on a car loan?

Interest on a car loan generally accrues daily based on the principal balance or amount you borrow. As you make loan payments, part of your payment amount goes toward the principal, and part goes toward paying accrued interest.

The higher your interest rate, the more total interest you’ll pay—but the length of your loan also affects your car loan payment. If you choose a loan with a longer repayment term, you’ll have lower monthly payments due to the extended repayment timeline. If you opt for a loan with a shorter term, your monthly payments will be higher, but you’ll pay less interest over the life of your loan.

For example, if you borrow $20,000 using a loan with a 5% interest rate and a 48-month term, your monthly payments will be around $461. But if you take 60 months to repay your loan at the same interest rate, your monthly payment will be $377.

How accurate is the vehicle loan calculator?

Our vehicle loan calculator provides generally accurate estimates based on the information you input, such as the loan amount, interest rate, and loan term. However, the accuracy of the calculator depends on the precision of the data entered and the assumptions made.

For instance, the calculator may not account for taxes, fees, insurance, or variations in interest rates due to credit score changes. It approximates your monthly payments and total loan cost, but the final figures may vary once all variables and lender-specific details are included.

To get the most accurate estimate, ensure the data you enter is as precise as possible, and consult lenders for detailed quotes. Using the auto loan calculator as a starting point will help you budget and compare loan options, but always follow up with your lender to confirm the exact terms and conditions.

How does my credit score affect my auto loan?

Your credit score is a major factor in calculating your auto loan rate. A higher credit score indicates lower risk as a borrower and increases your chances of being approved for a loan with a low interest rate. If your score is lower, you’ll likely be assigned a higher rate or could be denied a car loan.

If your credit score improves, you might be able to refinance your auto loan at a lower rate. Depending on where you are in your repayment term, this could save you money on the remaining balance. You’ll likely get better terms when it’s time to buy your next car as well.

Can I get an auto loan with bad credit?

Bad-credit auto loans are common—several lenders cater to borrowers with poor credit. Creditors can offer bad-credit auto loans with lower risk than bad-credit personal loans because they can repossess the car if the borrower doesn’t pay.

However, many auto loan lenders charge high interest rates and additional fees for bad-credit loans. Ensure the interest rate on your loan is fair and that the monthly payments are affordable—otherwise, you risk losing the vehicle and further damaging your credit.