Find the monthly payment, total cost, and total interest on a fixed-rate loan. Enter the amount, rate, and term.
Usage Tip
Compare the total interest, not just the monthly payment — a lower payment over a longer term often costs much more overall.
i = monthly rate (annual ÷ 12), N = number of months
Shortening the term raises the payment but cuts total interest sharply.
Extra payments go straight to principal and save interest, shortening the loan.
Fees and insurance are not included; the real APR may be higher than the rate.
How a Auto Loan Works
An auto loan calculator is also known as a car loan calculator – the two terms mean the same thing. You borrow the price of the vehicle minus your down payment and trade-in, plus sales tax and fees. That figure is the amount financed. You repay it in fixed monthly installments over the term, and each payment covers interest first and principal second – so early payments chip away at the balance slowly.
Monthly Payment Formula
The standard amortized payment formula is:
where P is the amount financed, r is the monthly rate (APR ÷ 12 ÷ 100), and n is the number of months. Multiply the payment by n to get the total of payments; subtract the amount financed to get the total interest.
APR vs Interest Rate
The interest rate is the cost of borrowing the principal. The APR (annual percentage rate) folds in certain lender fees, so it is usually a little higher and is the better number for comparing offers. This calculator uses the rate you enter as the APR for the payment math; always compare loans on APR.
Loan Term: Shorter vs Longer
| Term | Monthly payment | Total interest |
|---|---|---|
| Shorter (36-48 mo) | Higher | Lower |
| Longer (72-84 mo) | Lower | Higher |
Stretching the term lowers the monthly payment but you pay interest for longer, raising the total cost. Long terms also risk being upside-down (owing more than the car is worth) for much of the loan. The term comparison in the calculator shows the dollar difference.
Down Payment & Trade-In
A larger down payment or trade-in reduces the amount financed, which lowers both the payment and the total interest, and helps you avoid being upside-down. A common guideline is about 20% down on a new car and 10% on a used one, but more is always cheaper over the life of the loan.
Sales Tax & Fees
Most states charge sales tax on the price after the trade-in is deducted, which is why a trade-in can save tax as well as principal. Documentation, registration, and title fees are added to the amount financed unless you pay them up front. Tax rules vary by state – enter your local rate and confirm whether your state taxes the trade-in difference.
Tips to Lower the Cost
- Shop the APR with several lenders and get pre-approved before visiting the dealer.
- Choose the shortest term whose payment you can comfortably afford.
- Put more money down to cut interest and avoid being upside-down.
- Negotiate the vehicle price separately from the monthly payment.
- Watch add-ons rolled into the loan – they accrue interest too.
Frequently Asked Questions
How is my car payment calculated?
From the amount financed, the APR, and the term using the amortized payment formula above. Enter price, down, trade-in, tax, fees, rate, and months to see it.
Should I take a longer term for a lower payment?
It lowers the monthly payment but increases total interest and the time you may be upside-down. Compare the totals, not just the payment.
Does a trade-in reduce my sales tax?
In many states, yes – tax is charged on the price minus the trade-in. Check your state rules.
What is a good down payment?
Often about 20% on a new car and 10% on used, but more reduces interest and the risk of owing more than the car is worth.
What is the difference between APR and interest rate?
APR includes certain fees as well as the interest rate, so it is the better figure for comparing loans.
Can I pay the loan off early?
Usually yes; check for prepayment penalties. Extra payments go to principal and cut total interest.
Related Calculators
Note: results are estimates for general information only and are not financial advice or a loan offer. Actual payments depend on your lender APR, fees, taxes, credit, and state rules. Confirm figures with the lender before committing. Not a substitute for professional financial advice.