Car Loan Calculator

Buying a car is one of the largest purchases most people make, and financing adds complexity to the decision. Understanding your car loan payments, total interest costs, and how different loan terms affect your budget is essential for making informed decisions.

This free car loan calculator helps you calculate monthly payments, total interest, and compare different loan scenarios. It accounts for down payments, trade-in values, interest rates, and loan terms to give you a complete picture of your auto loan costs.

Use this tool to compare loan options, understand the true cost of financing, and ensure your car loan fits within your budget.

Follow these steps to calculate your car loan:

1. 1

   Enter Car Price

   Input the total purchase price of the car, including taxes and fees. This is the amount you're financing.

2. 2

   Enter Down Payment

   Enter your down payment amount. Larger down payments reduce loan amount, monthly payments, and interest costs. Aim for 10-20% minimum.

3. 3

   Enter Trade-In Value (Optional)

   If trading in a vehicle, enter its value. This reduces the loan amount along with your down payment.

4. 4

   Set Loan Terms

   Enter interest rate and loan term (years). Shop multiple lenders for the best rate. Shorter terms save interest but have higher payments.

5. 5

   Review Loan Details

   See your monthly payment, total amount paid, and total interest. Use this to compare loan options and make informed decisions.

Loan Amount: The amount you're borrowing (car price minus down payment and trade-in). This is what you'll pay interest on. Larger down payments reduce loan amount and interest costs.

Interest Rates: Car loan rates vary by credit score, loan term, and lender. Excellent credit (720+) can get 3-5%, while poor credit (under 630) may pay 10%+. Shop multiple lenders for the best rate.

Loan Terms: Common terms are 3-7 years. Shorter terms (3-4 years) have higher payments but save interest. Longer terms (5-7 years) have lower payments but cost more interest and increase risk of being underwater.

Total Cost: Don't just focus on monthly payment. Consider total interest paid over the loan term. A lower monthly payment with a longer term may cost thousands more in interest.

1. Put Down 10-20% Minimum

Larger down payments reduce loan amount, monthly payments, and interest costs. They also reduce risk of being underwater (owing more than car value). Aim for 10-20% down, more if possible.

2. Shop Multiple Lenders

Get pre-approved from your bank or credit union, then compare to dealer financing. Don't assume dealer financing is best. Compare rates, terms, and total costs to find the best deal.

3. Choose Shorter Terms When Possible

Shorter loan terms (3-4 years) save interest and build equity faster. Only choose longer terms if you truly can't afford higher payments. Avoid terms longer than the car's useful life.

4. Improve Credit Before Buying

Better credit scores get better rates. If your credit is poor, work on improving it before buying. Even a 50-point improvement can save thousands in interest over the loan term.

5. Consider Total Cost, Not Just Payment

Don't just focus on monthly payment. A longer term with lower payment may cost thousands more in interest. Use this calculator to see total cost and make informed decisions.

6. Avoid Being Underwater

Being underwater means you owe more than the car is worth. This happens with long terms, low down payments, or rapid depreciation. Avoid by putting more down, choosing shorter terms, or buying used cars.