An auto loan is a type of loan used to finance the purchase of a new or used car. The loan is secured by the vehicle, meaning the lender can repossess the car if the borrower defaults on payments. Auto loans are structured with a principal amount (the price of the car minus the down payment), an interest rate, and a loan term (the duration of the loan).
This calculator helps you estimate your monthly car payments, the total interest you'll pay over the life of the loan, and the total amount repaid. Understanding these figures is crucial for budgeting and making an informed decision when purchasing a vehicle.
How the Calculation Works:
The calculator uses the standard auto loan payment formula (also known as the annuity formula) to determine your estimated monthly payment:
$M = P \left[ \frac{i(1+i)^n}{(1+i)^n – 1} \right]$
M = Monthly Payment
P = Principal Loan Amount (Car Price – Down Payment)
n = Total Number of Payments (Loan Term in Years * 12)
Example:
If you purchase a car for $25,000 with a $5,000 down payment, the principal loan amount (P) is $20,000.
If the annual interest rate is 6.5% and the loan term is 5 years:
Total Number of Payments (n) = 5 years * 12 months/year = 60
Plugging these values into the formula would yield your estimated monthly payment. The calculator also computes the total interest paid (Total Payments * Monthly Payment – Principal) and the total amount repaid (Principal + Total Interest).
Key Factors to Consider:
Credit Score: Your credit score significantly impacts the interest rate you'll be offered. A higher score generally means a lower rate.
Loan Term: Longer loan terms result in lower monthly payments but higher total interest paid. Shorter terms mean higher monthly payments but less interest over time.
Down Payment: A larger down payment reduces the principal loan amount, lowering your monthly payments and the total interest paid.
APR (Annual Percentage Rate): This includes not just the interest but also any fees associated with the loan, giving you a more accurate picture of the total cost.
Use this calculator as a guide to explore different scenarios and understand the financial implications of various auto loan options.
// Update slider value and linked number input for Loan Term
var loanTermSlider = document.getElementById("loanTerm");
var loanTermValueSpan = document.getElementById("loanTermValue");
var loanTermNumberInput = document.getElementById("loanTermNumber");
loanTermSlider.oninput = function() {
loanTermValueSpan.innerHTML = this.value;
loanTermNumberInput.value = this.value;
// Trigger calculation when slider changes
calculateLoan();
}
loanTermNumberInput.oninput = function() {
if (parseInt(this.value) >= parseInt(this.min) && parseInt(this.value) = parseFloat(this.min) && parseFloat(this.value) <= parseFloat(this.max)) {
interestRateSlider.value = this.value;
interestRateValueSpan.innerHTML = parseFloat(this.value).toFixed(1);
// Trigger calculation when number input changes
calculateLoan();
} else {
// Optionally reset or show an error if out of range
this.value = interestRateSlider.value;
}
}
// Function to calculate the auto loan payment
function calculateLoan() {
var carPrice = parseFloat(document.getElementById("carPrice").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var loanTermYears = parseInt(document.getElementById("loanTerm").value);
var annualInterestRate = parseFloat(document.getElementById("interestRate").value);
var monthlyPaymentResult = document.getElementById("monthlyPayment");
var totalInterestResult = document.getElementById("totalInterest");
var totalRepaidResult = document.getElementById("totalRepaid");
// Clear previous results and error messages
monthlyPaymentResult.innerHTML = "$0.00";
totalInterestResult.innerHTML = "Total Interest Paid: $0.00";
totalRepaidResult.innerHTML = "Total Amount Repaid: $0.00";
// Validate inputs
if (isNaN(carPrice) || carPrice <= 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(loanTermYears) || loanTermYears <= 0 ||
isNaN(annualInterestRate) || annualInterestRate < 0) {
// Display an error or warning if inputs are invalid
// For simplicity, we'll just ensure no calculation happens with bad data
return;
}
var loanAmount = carPrice – downPayment;
// Ensure loan amount is not negative
if (loanAmount 0) {
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
// Handle the case of 0% interest
monthlyPayment = loanAmount / numberOfPayments;
}
var totalRepaid = monthlyPayment * numberOfPayments;
var totalInterest = totalRepaid – loanAmount;
// Display the results, formatted to two decimal places
monthlyPaymentResult.innerHTML = "$" + monthlyPayment.toFixed(2);
totalInterestResult.innerHTML = "Total Interest Paid: $" + totalInterest.toFixed(2);
totalRepaidResult.innerHTML = "Total Amount Repaid: $" + totalRepaid.toFixed(2);
}
// Initial calculation on page load
document.addEventListener("DOMContentLoaded", function() {
calculateLoan();
});