Car Loan Payment Calculator
A car loan is an amortising loan like a mortgage, just over a shorter term. The monthly payment depends on how much you borrow (price minus down payment and trade-in), the APR, and the term. This calculator turns those inputs into a monthly payment and total interest.
Enter the vehicle price, any down payment or trade-in, the APR, and the loan term in years. The calculator shows the monthly payment and the total interest over the term.
Use it to compare a dealer’s finance offer against a bank loan, or to see how a shorter term or a bigger down payment changes the monthly payment and total interest.
Enter your values to see the result.
How this is calculated
A car loan is an amortising loan like a mortgage, just over a shorter term. The amount you borrow is the vehicle price minus any down payment and trade-in value. This calculator applies the standard amortisation formula to that principal: M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where r is the monthly rate (APR ÷ 12) and n is the number of monthly payments (term in years × 12). Total interest is the monthly payment times n, minus the principal.
A trade-in reduces the principal just like a cash down payment, so enter both together to lower the amount financed. The APR, not the monthly payment, is the number to compare between offers — a longer term can show a lower payment while costing far more in interest.
The model assumes a fixed APR, equal monthly payments, and no fees. It does not include sales tax, registration, documentation fees, gap insurance, the effect of negative equity rolled in from a previous loan, or variable-rate offers. Long terms (6–7 years) can leave you owing more than the car is worth as it depreciates, which is a risk this calculation does not surface.
Worked example
A $30,000 vehicle, $5,000 down payment, 5.9% APR, 5-year term.
- 1Loan amount = 30,000 − 5,000 = $25,000.
- 2Monthly rate r = 0.059 ÷ 12 = 0.004917; months n = 60.
- 3Growth factor (1 + r)^n = 1.004917^60 ≈ 1.343.
- 4Monthly payment = 25,000 × 0.004917 × 1.343 ÷ 0.343 ≈ $481.
- 5Total paid = 481 × 60 = $28,860; total interest = 28,860 − 25,000 = $3,860.
Frequently asked questions
- How does a trade-in affect my loan?
- A trade-in reduces the amount you need to finance, just like a down payment. Enter the trade-in value on top of any cash down payment to lower the principal.
- What is a good car loan term?
- Shorter terms mean higher monthly payments but far less interest. Long terms (6–7 years) lower the payment but can leave you owing more than the car is worth.
- Should I use dealer financing or a bank loan?
- Compare the APR, not the monthly payment. A lower APR from a bank can beat a dealer’s longer-term offer even if the payment looks higher.
- How does a trade-in affect my loan?
- A trade-in reduces the amount you need to finance, just like a down payment. Enter the trade-in value on top of any cash down payment to lower the principal and shrink both the monthly payment and the total interest.
- What is a good car loan term?
- Shorter terms mean higher monthly payments but far less interest. Long terms (6–7 years) lower the payment but can leave you owing more than the car is worth as it depreciates, which is risky if you sell or total it early.
Related calculators
Method: standard fixed-rate amortisation formula applied to an auto loan. No external data source. Last updated: September 2026.
These results are indicative estimates for planning only and do not constitute financial advice. Actual loan terms, tax rules, investment returns and product conditions vary by country, provider and your personal circumstances. Always confirm figures with your bank, tax authority or a qualified financial adviser before making decisions.