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Auto Loan Calculator

Estimate your monthly car payment

See your monthly payment on a new or used car loan. Adjust the price, down payment, rate, and term to compare scenarios.

$
$100,000$100,000,000
%
1%20%
Yr
1 Yr30 Yr
Monthly EMI$701
Total Interest$7,080
Total Payment$42,080

How Auto Loans Work

An auto loan is a fixed-rate, fixed-term installment loan secured by the car itself. You make the same payment every month, with the principal portion growing and the interest portion shrinking each month. If you stop paying, the lender can repossess the vehicle.

Rates depend heavily on your credit score, the loan term, and whether the car is new or used. Used car loans typically run 1-2% higher than new car loans. Credit unions almost always beat dealer financing — check there first.

Choosing the Right Loan Term

For a $35,000 loan at 7.5%:

  • 36 months: $1,089/month, $4,200 total interest
  • 48 months: $846/month, $5,615 total interest
  • 60 months: $701/month, $7,050 total interest
  • 72 months: $604/month, $8,491 total interest
  • 84 months: $537/month, $9,930 total interest

Each extra year of term lowers the monthly payment by $50-$100 but adds ~$1,400 in interest. The 60-month is a reasonable balance for most buyers. Avoid 84-month loans — you'll be underwater (owe more than the car is worth) for 4-5 years, and total interest is more than double the 36-month option.

The Auto Loan Formula

M = P × r × (1 + r)n / ((1 + r)n - 1)

Where:

  • M = Monthly payment
  • P = Amount financed (car price - down payment - trade-in)
  • r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
  • n = Total number of payments (years × 12)

Example: Buying a $40,000 car with $5,000 down (financing $35,000) at 7.5% APR for 60 months. M = approximately $701/month. Total paid over the loan: $42,051. Interest portion: $7,051.

Frequently Asked Questions

How is a car loan payment calculated?
Same amortization formula as a mortgage: M = P × r × (1+r)^n / ((1+r)^n - 1). For $35,000 at 7.5% over 60 months, that's approximately $701/month, with $7,050 in total interest over the life of the loan.
What's the ideal car loan term?
60 months is the sweet spot for most buyers. Shorter terms save interest but stretch monthly cash flow. Longer terms (72-84 months) lower the payment but you'll owe more than the car is worth for years and total interest gets ugly. Avoid 84 months if you can.
Should I make a larger down payment?
Yes — at least 20% on new, 10% on used. Cars depreciate fastest in years 1-3. The more equity you start with, the less time you'll be upside-down on the loan, and the less interest you'll pay overall.
Should I get pre-approved before the dealership?
Always. Credit unions and online lenders often beat dealer financing by 1-2% APR. Walk in with a pre-approval and let the dealer try to beat it. Without one, you'll likely overpay on the financing even if you got a good price on the car.
Is 0% APR financing actually free money?
Not quite. Manufacturer 0% offers typically require above-average credit and replace any cash rebate you'd otherwise get. Sometimes taking the rebate and a regular loan saves more than 0% APR with no rebate. Run both scenarios — 0% isn't always the winner.

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