An auto loan is a type of loan used to finance the purchase of a new or used vehicle.
The loan amount is the price of the car minus any down payment you make.
You repay the loan over a fixed period (the loan term) with regular monthly payments that include both principal and interest.
This calculator helps you estimate your monthly payments and the total cost of your auto loan.
How the Calculation Works
The auto loan calculator uses a standard loan amortization formula to determine your monthly payment.
The formula for calculating the monthly payment (M) is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
P = Principal loan amount (the total amount borrowed)
i = Monthly interest rate (annual rate divided by 12)
n = Total number of payments (loan term in years multiplied by 12)
For example, if you borrow $25,000 at an annual interest rate of 5% for 5 years:
P = $25,000
Annual interest rate = 5% = 0.05
Monthly interest rate (i) = 0.05 / 12 = 0.0041667
Loan term = 5 years
Total number of payments (n) = 5 * 12 = 60
Plugging these values into the formula gives you the estimated monthly payment. The calculator also estimates the total interest paid over the life of the loan and the total amount you will repay.
Key Factors to Consider:
Loan Amount: The higher the amount financed, the higher your monthly payments will be. Consider a larger down payment to reduce this.
Interest Rate (APR): This is the cost of borrowing money. A lower Annual Percentage Rate (APR) means you pay less interest over time. Your credit score significantly impacts the rate you're offered.
Loan Term: A longer loan term means lower monthly payments, but you'll pay significantly more interest over the life of the loan. A shorter term means higher monthly payments but less total interest paid.
Down Payment: Paying a portion of the car's price upfront reduces the loan amount, lowering your monthly payments and the total interest you pay.
Use this calculator as a tool to explore different scenarios and make informed decisions about your next vehicle purchase.
function calculateAutoLoan() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTerm").value);
var monthlyPayment = 0;
var totalInterestPaid = 0;
var totalRepaid = 0;
if (isNaN(loanAmount) || loanAmount <= 0) {
alert("Please enter a valid Loan Amount.");
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
alert("Please enter a valid Annual Interest Rate.");
return;
}
if (isNaN(loanTermYears) || loanTermYears 0) {
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
monthlyPayment = loanAmount / numberOfPayments;
}
totalRepaid = monthlyPayment * numberOfPayments;
totalInterestPaid = totalRepaid – loanAmount;
document.getElementById("monthlyPayment").innerText = "$" + monthlyPayment.toFixed(2);
document.getElementById("totalInterestPaid").innerText = "Total Interest: $" + totalInterestPaid.toFixed(2);
document.getElementById("totalRepaid").innerText = "Total Amount Repaid: $" + totalRepaid.toFixed(2);
}
// Initialize calculation on page load if values are present
document.addEventListener("DOMContentLoaded", function() {
calculateAutoLoan();
});