Car Loan Payment Calculator
Estimate your monthly auto loan payments and total costs
36 Months (3 Years)
48 Months (4 Years)
60 Months (5 Years)
72 Months (6 Years)
84 Months (7 Years)
Estimated Monthly Payment
$0.00
Total Loan Amount
$0.00
Total Interest Paid
$0.00
Total Sales Tax
$0.00
Total Cost of Car
$0.00
How to Calculate Your Car Loan Payment
Buying a car is one of the most significant financial decisions you'll make. Understanding the math behind your monthly payment helps you negotiate better and avoid overextending your budget. This calculator uses the standard amortization formula to determine exactly what you'll owe each month.
The Car Loan Formula
The monthly payment is calculated using the following formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
- M: Total monthly payment
- P: Principal loan amount (Vehicle price + tax – down payment – trade-in)
- i: Monthly interest rate (Annual rate divided by 12)
- n: Number of months (Loan term)
Factors That Influence Your Payment
- Interest Rate (APR): This is the cost of borrowing money. Higher credit scores typically qualify for lower rates. Even a 1% difference can save thousands over the life of the loan.
- Loan Term: While a longer term (like 72 or 84 months) lowers your monthly payment, it significantly increases the total interest you pay.
- Down Payment: Putting more money down upfront reduces your principal, which lowers both your monthly payment and your total interest expense.
- Sales Tax and Fees: Don't forget that the price on the sticker isn't the final price. Sales tax, title, and registration fees are often rolled into the loan.
Example Calculation
Let's say you buy a car for $30,000 with 7% sales tax. Your total price is $32,100. If you put $5,000 down and have a $2,000 trade-in, your loan principal is $25,100. At a 5% interest rate for 60 months, your monthly payment would be $473.67, and you would pay a total of $3,320.14 in interest over 5 years.