Excellent (740+)
Good (670-739)
Fair (580-669)
Poor (<580)
Estimated Monthly Payment
$0.00
Estimates are based on typical rates and may vary.
Understanding Auto Loans and Credit Scores
Securing an auto loan is a significant step for many car buyers. The interest rate you're offered is heavily influenced by your credit score, which acts as a FICO score for lenders to gauge your creditworthiness. A higher credit score generally translates to lower interest rates, saving you a substantial amount of money over the life of the loan. This calculator helps you estimate your monthly payments based on different loan scenarios and your credit score.
How Credit Scores Affect Auto Loan Rates
Lenders use your credit score to assess the risk associated with lending you money.
Excellent Credit (740+): Typically qualifies for the lowest interest rates, often below 4%. This indicates a strong history of responsible credit management.
Good Credit (670-739): You'll likely receive competitive interest rates, usually in the 4%-6% range, though sometimes lower.
Fair Credit (580-669): Expect higher interest rates, possibly between 7% and 15%. Lenders see a greater risk here.
Poor Credit (<580): Auto loans can be difficult to obtain, and if approved, they will come with very high interest rates, often 15% or more. Subprime auto loans are common in this category.
These ranges are approximate and can fluctuate based on market conditions, lender policies, and the specific vehicle being financed.
The Math Behind the Monthly Payment
The monthly payment for an auto loan is calculated using the following loan amortization formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment
P = The principal loan amount (the amount you borrow)
i = Your monthly interest rate (your annual rate divided by 12)
n = The total number of monthly payments over the loan's lifetime (your loan term in years multiplied by 12)
For example, if you borrow $25,000 for 5 years (60 months) at an annual interest rate of 5% (0.05):
P = $25,000
i = 0.05 / 12 = 0.00416667
n = 5 * 12 = 60
Plugging these values into the formula gives you the estimated monthly payment. This calculator automates this calculation for you.
How to Use This Calculator
1. Enter Loan Amount: Input the total price of the vehicle minus your down payment.
2. Select Loan Term: Choose how many years you want to finance the vehicle over. Longer terms mean lower monthly payments but more interest paid overall.
3. Select Your Credit Score: Choose the category that best represents your credit score. The calculator will suggest a typical interest rate for that tier.
4. Calculate: Click the button to see your estimated monthly payment.
This tool provides a useful estimate to help you budget for your next car purchase and understand the impact of your credit score on financing costs. Remember to get pre-approved by lenders to know your exact interest rate.
function updateSliderValue(sliderId, spanId) {
var slider = document.getElementById(sliderId);
var span = document.getElementById(spanId);
span.textContent = slider.value;
updateInterestRate(document.getElementById('creditScore').value);
}
function updateInterestRate(creditScore) {
var interestRateInput = document.getElementById('interestRate');
var interestRateDisplay = document.getElementById('interestRateDisplay');
var rate = 0;
switch (creditScore) {
case 'excellent':
rate = 3.5;
break;
case 'good':
rate = 5.5;
break;
case 'fair':
rate = 9.0;
break;
case 'poor':
rate = 15.0;
break;
default:
rate = 5.5; // Default to good if something unexpected happens
}
interestRateInput.value = rate;
interestRateDisplay.value = rate.toFixed(1);
}
function calculateLoan() {
var loanAmount = parseFloat(document.getElementById('loanAmount').value);
var loanTermYears = parseInt(document.getElementById('loanTerm').value);
var annualInterestRate = parseFloat(document.getElementById('interestRate').value);
var resultDisplay = document.getElementById('result-value');
// Validate inputs
if (isNaN(loanAmount) || loanAmount <= 0 ||
isNaN(loanTermYears) || loanTermYears <= 0 ||
isNaN(annualInterestRate) || annualInterestRate < 0) {
resultDisplay.textContent = "Invalid input";
return;
}
var monthlyInterestRate = annualInterestRate / 100 / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyPayment = 0;
// Handle case where interest rate is 0 to avoid division by zero
if (monthlyInterestRate === 0) {
monthlyPayment = loanAmount / numberOfPayments;
} else {
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
if (isNaN(monthlyPayment) || monthlyPayment === Infinity) {
resultDisplay.textContent = "Calculation Error";
} else {
resultDisplay.textContent = "$" + monthlyPayment.toFixed(2);
}
}
// Initialize slider value display and interest rate on page load
window.onload = function() {
updateSliderValue('loanTerm', 'loanTermValue');
updateInterestRate(document.getElementById('creditScore').value);
};