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Auto Loan Calculator

Calculate monthly car payments, total interest paid, and total cost for any fixed-rate auto loan. Enter the loan amount, annual interest rate (APR), and term in months or years. Optionally add extra monthly payments to see how much interest and time you save by paying ahead. Works for new cars, used cars, refinancing, and any fixed-rate vehicle loan.

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Formula

M = P x r(1+r)^n / ((1+r)^n - 1) where r = monthly rate and n = total months.

The standard amortization formula calculates a fixed monthly payment that covers both principal and interest over the loan term. Each month, interest accrues on the remaining balance. Early payments are mostly interest; later payments are mostly principal. Extra monthly payments reduce the principal faster, lowering total interest and potentially shortening the loan.

Worked Example

Loan: $25,000 at 8% APR for 60 months: Step 1: Monthly rate r = 8% / 12 = 0.6667% Step 2: M = 25000 x 0.006667 x (1.006667)^60 / ((1.006667)^60 - 1) Step 3: M = 25000 x 0.006667 x 1.4898 / 0.4898 = $506.91/month Step 4: Total paid = $506.91 x 60 = $30,414.60 Step 5: Total interest = $30,414.60 - $25,000 = $5,414.60 With $100 extra monthly: saves approximately $850 in interest and pays off 8 months early.

Frequently Asked Questions

Does this include sales tax, dealer fees, and registration?

Only what you include in the loan amount. If you finance sales tax, dealer documentation fees, extended warranties, or GAP insurance, add those to the loan principal before entering it. The calculator computes payments on whatever total you provide.

Is the interest rate the same as APR?

APR (Annual Percentage Rate) can include certain fees beyond the base interest rate. For most auto loans, the difference is small. This calculator uses the rate you enter as the nominal annual rate for monthly interest accrual. Enter the APR from your loan offer for the most accurate estimate.

How do extra monthly payments save money?

Extra payments go directly toward reducing the principal balance. Since interest is calculated on the remaining balance each month, a lower balance means less interest accrues. This creates a compounding savings effect that both reduces total interest paid and shortens the loan term.

What is a typical auto loan interest rate?

Rates depend on credit score, loan term, and whether the car is new or used. As of recent years, new car rates range from 4% to 8% for good credit, while used car rates are typically 1% to 3% higher. Subprime borrowers may see rates of 10% to 20% or more.

Should I choose a longer or shorter loan term?

Shorter terms (36 to 48 months) have higher monthly payments but significantly less total interest. Longer terms (60 to 84 months) lower the monthly payment but increase total interest cost. For a $25,000 loan at 8%, choosing 48 months over 72 months saves approximately $2,800 in interest.

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