Auto Loan Calculator

An auto loan is a fixed-rate installment loan used to purchase a vehicle. You borrow a specific amount (the vehicle price minus your down payment and trade-in) and repay it in equal monthly installments over a set term, typically 3-7 years.

Each monthly payment includes two parts:

• Principal: The portion that reduces your loan balance.
• Interest: The cost of borrowing, calculated on the remaining balance.

In the early months, a larger portion goes toward interest. As the balance decreases, more of each payment goes toward principal.

Shorter loan terms have higher monthly payments but save significantly on interest:

• 36 months: Highest payment, lowest total interest. Best if you can afford it.
• 48-60 months: Balanced — manageable payments without excessive interest. Most popular choice.
• 72-84 months: Lowest payment, but you pay much more in interest and risk being "underwater" (owing more than the car is worth) longer.

Example: On a $30,000 loan at 6.5%, a 36-month term costs $2,920 in interest, while a 72-month term costs $6,370 — more than double.

Your interest rate depends primarily on your credit score, loan term, and whether the car is new or used:

• Check your credit score before shopping. Scores above 720 get the best rates.
• Get pre-approved through your bank or credit union before visiting dealerships.
• Put 20% down to avoid being underwater and to get better rates.
• Choose a shorter term — rates are typically lower for 36-48 month loans.
• New cars get better rates — used car loans are typically 1-2% higher.
• Shop around — compare offers from at least 3 lenders.