Car Loan Calculator
Estimate your monthly car loan payment and total interest.
How to use this tool
- Enter loan amount, annual rate and term in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your monthly payment and the full breakdown beneath it.
Estimate your monthly car loan payment and total interest.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Monthly payment M = P × r(1 + r)n ÷ [(1 + r)n − 1]
When rate = 0: M = P ÷ n.
Where P = loan amount, r = monthly rate (annual rate ÷ 12 ÷ 100), n = total monthly payments (years × 12).
Total interest = M × n − P. Total paid = M × n.
How it works
This calculator applies the standard amortisation formula to a car loan, computing the equal monthly instalment that pays off the financed amount (purchase price minus any down payment) at the given interest rate over the loan term.
Results assume a fixed interest rate and no additional fees such as origination charges or GAP insurance; the actual cost of financing from a dealer or lender may be higher. A larger down payment reduces both the principal and total interest paid.
Worked example
- Inputs: $24,000 loan, 0% annual rate, 2-year term.
- Number of payments: n = 2 × 12 = 24.
- Because rate = 0, use simplified formula: M = 24,000 ÷ 24 = $1,000.
- Total paid = 1,000 × 24 = $24,000. Total interest = $24,000 − $24,000 = $0.
Monthly payment = $1,000 | Total interest = $0 | Total paid = $24,000
Common mistakes to avoid
- Entering the sticker price instead of the financed amount — deduct the down payment and trade-in before entering the principal to get the actual loan balance.
- Ignoring dealer add-ons (GAP insurance, extended warranty) rolled into the loan, inflating the principal and total interest paid.
- Comparing monthly payments across loans with different terms without checking total interest — a lower monthly payment on a longer term often costs thousands more overall.
Key terms
- Car loan (auto loan)
- A secured instalment loan used to finance a vehicle purchase, with the car itself serving as collateral.
- Down payment
- An upfront cash payment that reduces the amount financed; a larger down payment lowers monthly payments and total interest.
- Loan term
- The number of months or years over which the loan is repaid; typical car loans range from 24 to 84 months.
- Monthly payment
- The fixed amount paid each month, covering both the interest accrued and the principal reduction for that period.
- GAP insurance
- Guaranteed Asset Protection coverage that pays the difference between the loan balance and the car's actual cash value if the vehicle is totalled or stolen before the loan is paid off.
Frequently asked questions
- Should I finance the full car price or put money down?
- A larger down payment reduces your principal, lowering both the monthly payment and total interest. It also reduces the risk of being underwater (owing more than the car is worth).
- What is a good interest rate for a car loan?
- Rates vary by credit score and term. Borrowers with excellent credit (720+) typically qualify for rates under 5-6% on new cars; subprime borrowers may see 15-25%+.
- How does loan term length affect total cost?
- A 72-month loan has lower monthly payments than a 48-month loan on the same amount, but you pay interest for 24 extra months. Total interest paid is significantly higher on the longer term.