Auto loan calculator

First find the amount financed: vehicle price minus the cash incentive, down payment, and trade-in value, plus any amount still owed on the trade. Add sales tax and fees if you roll them into the loan. A fixed-payment amortization formula then spreads that principal and its interest across the number of months in the term. The payment stays level, but the early payments contain more interest and the later payments contain more principal.

The interest rate is the percentage used to calculate interest on the principal and the monthly payment. APR is a broader yearly measure that can also reflect certain prepaid finance charges and lender fees. Enter the loan interest rate in this calculator, then use APR from each disclosure when comparing offers because two loans can advertise the same rate but carry different costs.

A larger down payment reduces the loan, the monthly payment, and the chance of owing more than the car is worth. Guidelines often land around 20% for a new vehicle and 10% for a used one, but the right amount still has to leave your emergency fund intact. The useful test is to change the down payment above and compare both the payment and the total interest, not only the first number.

A 72-month term lowers the required payment by spreading the principal across another year, but it usually adds interest and keeps you exposed to negative equity for longer. A 60-month loan costs more each month and gets the title clear sooner. Compare the same vehicle and interest rate at both terms, then make sure the shorter payment still fits beside insurance, fuel, repairs, and your other goals.

The dealer applies the trade-in value as a credit, then pays off any loan still attached to the old vehicle. If the car is worth more than the payoff, that positive equity works like another down payment. If the payoff is larger, the difference is negative equity and usually gets added to the new loan. Many states also reduce the taxable purchase price by the trade-in value, but that rule is not universal.

Financing them reduces the cash needed at signing, but you then pay interest on those costs for the whole term. Paying them upfront keeps the loan smaller. Toggle the option above to see the exact difference. Ask the dealer for an itemized out-the-door worksheet so registration, documentation, destination, protection products, and other add-ons do not disappear inside one monthly payment.

There is no single cutoff. Lenders price the loan using credit history, income, existing debt, term, vehicle age, loan-to-value ratio, and other underwriting factors. Stronger credit generally earns a lower APR, while a larger down payment can help by lowering the lender risk. Prequalifying with several lenders lets you compare likely terms before the dealership without assuming the lowest advertised rate applies to you.

No. The payment covers only the financed purchase and loan interest. Auto insurance, fuel or charging, maintenance, repairs, parking, annual registration renewals, and depreciation all sit outside the loan. A payment that fits by itself can still produce an unaffordable vehicle, so add those costs to your monthly budget before deciding what price works.

Many auto loans allow early payoff, and doing it reduces future interest when the loan uses simple interest. Check the contract for a prepayment penalty and ask the lender how extra money is applied. Some contracts use precomputed interest or other rules that change the savings. This calculator shows the original fixed schedule, not an accelerated payoff scenario.