Car Loan Calculator
The Monthly Payment Hides More Than It Shows
An auto loan quote usually arrives as a single monthly number, but that figure is the output of five separate inputs — price, tax, down payment, trade-in, rate, and term — each pulling in a different direction. Two loans with identical monthly payments can carry very different total interest costs depending on how the term and rate combine, which is why it's worth running the amortization math directly rather than trusting a dealership worksheet.
The Formula
Monthly Rate (r) = (Annual Rate ÷ 100) ÷ 12
Monthly Payment (M) = P × [r(1+r)n] ÷ [(1+r)n − 1]
P is the loan principal and n is the number of monthly payments. When the rate is 0%, the formula falls back to a simple principal-divided-by-term split.
Where This Matters
- Comparing dealer financing to a bank or credit union pre-approval — running both rates against the same principal and term isolates which offer actually costs less.
- Deciding on a larger down payment — because interest compounds on the outstanding principal, a bigger down payment reduces total interest by more than its face value would suggest.
- Term length trade-offs — stretching a loan from 48 to 72 months lowers the monthly payment but increases total interest paid, and the exact gap depends on the rate.
- Trade-in valuation checks — entering a trade-in allowance shows precisely how much it reduces the financed principal, separate from any negotiation on price.
Monthly Payment on a $30,000 Loan, 60-Month Term
| APR | Monthly Payment | Total Interest |
|---|---|---|
| 3% | $539.06 | $2,343.64 |
| 5% | $566.14 | $3,968.22 |
| 7% | $594.04 | $5,642.16 |
| 9% | $622.75 | $7,365.04 |
| 12% | $667.33 | $10,040.01 |
Figures assume no down payment or trade-in and no sales tax, computed directly from the amortization formula above.
How to Use This Calculator
- Enter the vehicle price.
- Enter any down payment and trade-in value (both optional, default to zero).
- Enter the annual interest rate and the loan term in months.
- Enter your local sales tax rate if applicable.
- Select Calculate to see the monthly payment, total amount paid, and total interest.
Related Calculations
Comparing buying against leasing? Run the same vehicle through the Lease Payment Calculator to compare monthly costs side by side.