Purchasing a car is a significant financial decision, and understanding the terms of your car loan is crucial. A car loan, also known as an auto loan, is a type of secured loan where the vehicle you are purchasing serves as collateral. This means if you fail to make your payments, the lender can repossess the car.
Our car loan calculator helps you estimate your monthly payments and the total cost of your loan based on the car's price, your down payment, the loan term, and the annual interest rate.
How the Calculation Works:
The calculator uses a standard loan amortization formula to determine your monthly payment. The formula for the monthly payment (M) is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
P is the Principal Loan Amount (Car Price – Down Payment).
i is the Monthly Interest Rate (Annual Interest Rate / 12 / 100).
n is the Total Number of Payments (Loan Term in Years * 12).
The calculator then uses this monthly payment to calculate:
Total Principal Paid: This is simply the initial Principal Loan Amount (P).
Total Interest Paid: This is the Total Amount Paid minus the Total Principal Paid.
Total Amount Paid: This is the Monthly Payment multiplied by the Total Number of Payments (M * n).
Example Scenario:
Let's say you want to buy a car priced at $25,000. You plan to make a down payment of $5,000. You want a loan term of 5 years and the lender offers an annual interest rate of 6.5%.
Car Price: $25,000
Down Payment: $5,000
Principal Loan Amount (P): $25,000 – $5,000 = $20,000
This calculator provides an estimate to help you budget and compare loan offers. It's always recommended to speak with your lender for precise figures and terms.
function calculateCarLoan() {
var carPrice = parseFloat(document.getElementById("carPrice").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var monthlyPayment = 0;
var totalPrincipal = 0;
var totalInterest = 0;
var totalAmountPaid = 0;
var resultElement = document.getElementById("result");
var monthlyPaymentSpan = document.getElementById("monthlyPayment");
var totalPrincipalSpan = document.getElementById("totalPrincipal");
var totalInterestSpan = document.getElementById("totalInterest");
var totalAmountPaidSpan = document.getElementById("totalAmountPaid");
// Basic validation
if (isNaN(carPrice) || carPrice <= 0) {
alert("Please enter a valid Car Price.");
return;
}
if (isNaN(downPayment) || downPayment < 0) {
alert("Please enter a valid Down Payment.");
return;
}
if (isNaN(loanTerm) || loanTerm <= 0) {
alert("Please enter a valid Loan Term (in years).");
return;
}
if (isNaN(interestRate) || interestRate carPrice) {
alert("Down payment cannot be greater than the car price.");
return;
}
var principal = carPrice – downPayment;
var monthlyInterestRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
totalPrincipal = principal;
if (monthlyInterestRate > 0) {
monthlyPayment = principal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
monthlyPayment = principal / numberOfPayments; // Simple division if interest rate is 0
}
totalAmountPaid = monthlyPayment * numberOfPayments;
totalInterest = totalAmountPaid – principal;
// Format results to two decimal places
monthlyPaymentSpan.textContent = "$" + monthlyPayment.toFixed(2);
totalPrincipalSpan.textContent = "$" + totalPrincipal.toFixed(2);
totalInterestSpan.textContent = "$" + totalInterest.toFixed(2);
totalAmountPaidSpan.textContent = "$" + totalAmountPaid.toFixed(2);
}