Car Loan Calculator
Know your real monthly payment before you sit down at the dealership. Enter the vehicle price, down payment, trade-in value, APR, and term to see exactly what you'll owe each month and in total interest.
*Estimates only. Excludes sales tax, fees, and add-ons. Consult your lender for exact figures.
Curious how this fits your overall budget?
Debt-to-Income Calculator🚗 Financing a Car the Smart Way
Understand the math dealerships use so you can negotiate with confidence.
How it Works
Subtracts your down payment and trade-in value from the vehicle price to get the amount financed, then amortizes that balance over your loan term at the given APR.
The Formula
M = P × [r(1+r)^n] / [(1+r)^n − 1], where P = amount financed, r = APR ÷ 12, n = term in months.
Pro Tip
Get pre-approved by a bank or credit union before visiting the dealer. It gives you a rate to compare against and negotiating leverage, since dealer financing often marks up the rate.
Frequently Asked Questions
How is a car loan monthly payment calculated? +
The monthly payment uses the standard amortizing loan formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount (price minus down payment and trade-in), r is the monthly interest rate (APR ÷ 12), and n is the number of monthly payments (loan term in months).
Does a bigger down payment always help? +
Yes, in two ways: it lowers your monthly payment and it reduces total interest paid over the life of the loan, since interest is charged on a smaller principal. A down payment of 10-20% also helps avoid being "upside down" on the loan (owing more than the car is worth) as new vehicles depreciate quickly.
What's a good APR for a car loan? +
Rates vary by credit score, loan term, and whether the car is new or used. Borrowers with excellent credit (720+) often qualify for rates in the 5-7% range on new cars, while those with fair or poor credit may see rates of 12% or higher. Used car loans typically carry higher rates than new car loans.
Should I choose a longer loan term for a lower payment? +
A longer term (72 or 84 months) lowers your monthly payment but increases total interest paid and keeps you in debt longer relative to the car's depreciation. A shorter term (36-48 months) costs more per month but saves money overall and builds equity faster.
How does a trade-in affect my loan? +
A trade-in's value is subtracted from the vehicle price just like a down payment, directly reducing the amount you finance. In many states, trading in a vehicle also reduces the sales tax owed on the new purchase, since tax is calculated on the price after the trade-in credit.