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How to Calculate Your Auto Loan Payments
Understanding your auto loan is a critical step in the car-buying process. This auto loan calculator is designed to clarify all the costs involved, helping you budget accurately and avoid surprises. Unlike a simple personal loan, a car loan has several moving parts: the vehicle's price, a down payment, the value of your trade-in, and state sales tax. Our tool combines all these factors to give you a clear estimated monthly payment.
The most important factors in your loan are the **Annual Interest Rate (APR)** and the **Loan Term**. The APR is the total cost of borrowing money, including interest and some fees. A lower APR, often secured with a good credit score, can save you thousands. The term, or length of the loan (e.g., 60 months), affects your monthly payment. A longer term means lower monthly payments, but you'll pay significantly more in total interest.
Use this calculator to your advantage. See how increasing your down payment or trade-in value can lower your principal and, consequently, your monthly bill. Compare a 60-month loan to a 72-month loan to see the interest difference. The amortization schedule below will even show you, month-by-month, how much of your payment goes to principal vs. interest. This transparency empowers you to make a smart financial decision.
Payment Schedule
| Month | Principal | Interest | Remaining Balance |
|---|---|---|---|
| Enter your loan details above and click "Calculate" to see your payment schedule. | |||
Frequently Asked Questions
What is APR (Annual Percentage Rate)?
APR is your annual interest rate. It's the price you pay each year to borrow money, expressed as a percentage. A lower APR means lower borrowing costs. Your credit score is the biggest factor in determining your APR.
How much should my down payment be?
A larger down payment is always better. It reduces the amount you need to borrow, which lowers your monthly payments and saves you on total interest. A common recommendation is 10-20% of the vehicle's price.
What's the difference between a 60-month and 72-month loan?
A 72-month (6-year) loan will have lower monthly payments than a 60-month (5-year) loan. However, you will pay significantly more in total interest over the life of the 72-month loan. It's a trade-off between a lower monthly bill and a higher total cost.