Calculate Your Car Loan

Enter your vehicle purchase details below. Calculations update automatically:

Vehicle Price ($)

Down Payment ($)

Trade-in Value ($)

Interest Rate (%)

Loan Term (Years)

How Car Loans Work

A car loan is an installment loan used to purchase a vehicle. You borrow money from a lender and repay it over time with interest. Understanding your monthly payments and total costs helps you make informed decisions.

Car Loan Formula

The monthly payment is calculated using the loan payment formula:

M = P × [r(1+r)^n] / [(1+r)^n - 1]

Where:

M = Monthly payment
P = Principal (loan amount)
r = Monthly interest rate
n = Number of payments

Understanding Your Loan

The financed amount is calculated as:

Financed Amount = Price - Down Payment - Trade-in Value

Factors Affecting Your Payment

Vehicle Price: Higher prices mean higher loan amounts
Down Payment: Larger down payments reduce the financed amount
Trade-in Value: Trade-ins reduce your financed amount
Interest Rate: Higher rates increase monthly payments
Loan Term: Longer terms lower monthly payments but increase total interest

Example

For a $25,000 car with $5,000 down payment at 6% interest for 5 years:

Financed Amount = $25,000 - $5,000 = $20,000
Monthly Payment ≈ $399.29
Total Interest ≈ $3,957.40
Total Cost ≈ $23,957.40

💡 Tip: Shop around for the best interest rates. Even a 1% difference can save you hundreds of dollars over the life of your loan.