Many car buyers take out a loan to finance their purchase of cars or some home appliances, either from the dealer or through a bank.
Loan payment for the car will be based primarily on the price of the car, whether it is new or used, the down payment, the length of the loan, and your credit score.
In this article, I’ll show you the simplest way to calculate your car loan with ease.
How to calculate car loan with car loan calculator
To calculate your car loan easily, head over to this loan calculator
You will be required to enter the car amount (principal), the interest rate, repayment period (months) and down payment (upfront fee) as shown in the image below
Click calculate and the calculator with process your request and give you results within seconds. The results will be as shown below
After you enter the details, the auto loan payment calculator automatically displays the results, including the dollar amounts for the following:
Total monthly payment: The amount you’ll pay each month for the duration of the loan. Some of each monthly payment goes toward paying down the principal, and part applies to interest.
Total principal paid: The total amount of money you’ll borrow to buy the car.
Total interest paid: The total amount of interest you’ll have paid over the life of the loan. In general, the longer you take to repay the loan, the more interest you pay overall. Add together the total principal paid and total interest paid to see the total overall cost of the car.
Ensure you use the auto loan calculator before you head to the car lot so you’ll be ready to find a car that fits your budget and negotiate the best deal.
How Is Interest Calculated on a Car Loan?
An auto loan calculator shows the total amount of interest you’ll pay over the life of a loan. If the calculator offers an amortization schedule, you can see how much interest you’ll pay each month. With most car loans, part of each payment goes toward the principal (the amount you borrow), and part goes toward interest.
The interest you pay each month is based on the loan’s then-current balance. So, in the early days of the loan, when the balance is higher, you pay more interest. As you pay down the balance over time, the interest portion of the monthly payments gets smaller.
You can use the car loan calculator to determine how much interest you owe, or you can do it yourself if you’re up for a little math.
Your monthly auto loan payment will depend on the car price, down payment, length of the loan (term), and interest rate of the loan, which is highly dependent on your credit score. Interest rates on used car loans also tend to be higher than those on new car loans. Use the inputs below to get a sense of what your monthly auto loan payment could end up being.
