Car Loan Calculator (monthly payment + total interest)
Enter car price, down payment, trade-in value, APR, and term in months. Returns the monthly payment using the standard amortization formula plus a full breakdown of principal, interest, and total cost.
- Monthly payment
- 46,608
- Loan amount
- 2,500,000
- Total interest
- 296,453
- Total of payments
- 2,796,453
How it works
How the monthly payment is calculated
We use the standard amortization formula: M = P × r / (1 − (1 + r)^−n), where P is the loan amount (price minus down payment minus trade-in), r is the monthly rate (APR / 12), and n is the number of months. Each monthly payment is split between interest (on the remaining balance) and principal (reducing the balance).
Early in the loan, most of your payment goes to interest. By the last few months, almost all of it goes to principal. This is why making extra principal-only payments early in the loan saves significantly more interest than the same extra payments late.
Term length tradeoffs
Shorter term (24-36 months): higher monthly payment, but much less total interest. You also build equity faster, reducing risk of being 'underwater' (owing more than the car is worth) if you need to sell.
Standard term (60 months): the most common balance between affordability and total interest. Most lenders advertise rates assuming a 60-month term.
Long term (72-84 months): lower monthly payment, but you pay significantly more interest and the car may be worth less than the loan balance for years. Generally avoid 84-month terms unless you have no alternative.
Beyond the loan: total cost of ownership
The loan payment is only one part of car cost. Add insurance ($100-300/month typical), fuel ($100-300/month depending on commute), maintenance ($50-150/month average), registration and taxes (annual), and depreciation (especially heavy in years 1-3). For a $30,000 car, total monthly cost can easily be $700-1,000 even with a $400 loan payment.
Lender 'pre-approval' is your friend. Get pre-approved for a loan amount and rate before walking into a dealership. Dealers often pad the rate (the 'dealer markup') by 1-3 percentage points; a pre-approval gives you negotiating leverage.
Frequently asked questions
›How much should my down payment be?
Aim for at least 10-20% of the vehicle price. A 20% down payment helps you avoid being underwater quickly and often qualifies for better rates.
›Is APR the same as interest rate?
Close, but APR includes some fees (origination, etc.) while interest rate is purely the borrowing cost. APR is the more accurate comparison number.
›Why do dealers always quote 60 or 72 months?
Because it makes the monthly payment look affordable. The total cost over 72 months can be 30%+ higher than over 36 months at the same rate.
›Can I pay off my car loan early?
Most loans allow this without penalty in the US, but check your loan agreement. In Japan and some EU countries, early-payoff fees are common — read the terms.
›What's a good APR for a car loan?
In normal rate environments: 4-7% for new cars with good credit, 6-10% for used cars or fair credit. Above 12% usually means subprime financing — explore alternatives if possible.
›Should I buy or lease?
Lease for short ownership (2-3 years) and predictable monthly cost. Buy if you keep cars long (5+ years) — total cost is lower over time. Our tool models the buy-with-loan scenario.
›How does the trade-in work in this calculator?
Trade-in value reduces the loan amount, just like a down payment. So $30,000 car − $5,000 trade-in − $2,000 down = $23,000 loan.
›Does the data leave my browser?
No. Everything runs locally; nothing is sent to a server.
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