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Auto Loan Payment Calculator

Auto Loan Payment Calculator

Auto Loan Payment Calculator

Enter values to calculate your auto loan payment.

Auto Loan Payment Calculator: How to Calculate Car Payments

How Auto Loan Payments Work

Auto loan payments are calculated using amortization formulas that account for:

  • Principal amount
  • Annual interest rate
  • Loan term (months)
  • Down payment
  • Trade-in value

Monthly Payment Formula

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

  • M: Monthly payment
  • P: Principal loan amount
  • i: Monthly interest rate (annual rate ÷ 12)
  • n: Total number of payments

Factors Affecting Car Payments

Factor Impact on Payment Example Change
Loan Term Extension Reduces monthly payment 60mo → 72mo (-$75/mo)
Credit Score Improvement Lowers interest rate 7% → 5% (-$45/mo)

Step-by-Step Calculation

Example: $30,000 Loan at 6% for 60 Months

  1. Convert APR to monthly rate: 6% ÷ 12 = 0.005
  2. Calculate (1 + i)^n: (1.005)^60 ≈ 1.34885
  3. Multiply principal by rate: 30,000 × 0.005 = 150
  4. Final calculation: 150 × 1.34885 / (1.34885 - 1) ≈ $579.98/mo

Comparison: Loan Terms vs Payments

Loan Amount 36 Months 48 Months 60 Months
$20,000 $608 $469 $387

7 Tips for Better Auto Loans

  • Maintain credit score above 700
  • Keep loan term under 60 months
  • Make at least 20% down payment

FAQs

Q: How does down payment affect payments?
A: $5,000 down on $30k loan reduces monthly payment by ≈$93 (60mo @5%)

Q: Are online calculators accurate?
A: Yes, within 1-2% of actual lender quotes

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