Car Loan Calculator
Calculate the monthly payment on your car loan based on car price, down payment or trade-in value, interest rate and term.
At —% interest, the monthly payment would be — — — more per month than today.
How to use the car loan calculator
- Enter the car price you plan to pay.
- Enter your down payment, or the value of the car you're trading in.
- Enter the interest rate and desired repayment period — the calculator shows the monthly payment and total interest cost.
How the car loan is calculated
The loan amount is the car price minus down payment/trade-in. The monthly payment is then calculated with the amortization formula:
where L is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of months.
Worked example: a $35,000 car with $5,000 traded in leaves a loan of 35,000 − 5,000 = $30,000, which at 7.5 % over 7 years costs $460 per month and $8,652 in interest. The identical $30,000 borrowed at 6.5 % over 5 years costs more per month, $587, but only $5,219 in interest. A longer term lowers the monthly payment and raises the total — the car does not get cheaper by being paid off more slowly.
Car loans usually have a shorter term than mortgages — often 5–10 years — since the car loses value over time.
Frequently asked questions
Should I choose a long or short term for my car loan?
A shorter term gives a higher monthly payment but lower total interest costs. Since a car depreciates in value, too long a term can leave you owing more than the car is worth (an "underwater" loan).
Is it smart to use a trade-in as a down payment?
Yes, it reduces your loan amount directly. Keep in mind the trade-in value the dealer offers may be lower than what you could get selling the car privately.