Financing a vehicle is a significant decision, and understanding your monthly payments is crucial.
This calculator helps you estimate your typical monthly auto loan payment based on the loan amount,
annual interest rate, and loan term. Bank of America offers various auto financing options, and
this tool provides a simplified way to explore potential payment scenarios.
How Auto Loan Payments Are Calculated
The calculation for a fixed-rate auto loan is based on the standard amortization formula.
This formula determines the fixed periodic payment required to fully amortize a loan over its
term. The key variables are:
Loan Amount (P): The total amount of money borrowed for the vehicle.
Annual Interest Rate (r): The yearly interest rate charged by the lender. This needs to be converted to a monthly rate for the calculation.
Loan Term (n): The total number of payments (months) over which the loan will be repaid.
The formula used is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly payment
P = The principal loan amount (the total amount you borrow)
i = Your monthly interest rate (annual rate divided by 12)
n = The total number of payments over the loan's lifetime (loan term in years multiplied by 12)
Example Calculation
Let's say you are looking to finance a car with the following details:
Loan Amount (P): $30,000
Annual Interest Rate: 7.0%
Loan Term: 6 years
First, we convert the annual rate to a monthly rate (i):
7.0% / 12 months = 0.07 / 12 ≈ 0.005833
Next, we convert the loan term to the total number of months (n):
6 years * 12 months/year = 72 months
So, the estimated monthly payment for this example would be approximately $513.48. This calculator performs a similar calculation for the values you input.
Factors to Consider with Bank of America Auto Loans
When considering an auto loan with Bank of America or any lender, remember that the actual rate and terms you qualify for will depend on your creditworthiness, the vehicle's age and mileage, your down payment, and current market conditions. It's always recommended to get pre-approved to understand your specific financing options.
function calculateAutoLoan() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var resultElement = document.getElementById("result").getElementsByTagName("span")[0];
if (isNaN(loanAmount) || isNaN(interestRate) || isNaN(loanTerm) || loanAmount <= 0 || interestRate <= 0 || loanTerm <= 0) {
resultElement.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
var monthlyInterestRate = interestRate / 100 / 12;
var numberOfPayments = loanTerm * 12;
var monthlyPayment;
if (monthlyInterestRate === 0) {
monthlyPayment = loanAmount / numberOfPayments;
} else {
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
resultElement.innerHTML = "$" + monthlyPayment.toFixed(2);
}