Car Loan Payment Calculator
By Mustafa Bilgic · Updated 21 August 2026
Your monthly car loan payment depends on three numbers: the amount financed, the annual interest rate, and the loan term in months. Enter those figures above and the calculator returns your exact payment, cumulative interest, and a month-by-month amortization schedule. The rest of this page explains how the math works so you can spot a good deal before you sign.
This calculator uses the standard fixed-rate amortization formula. Actual loan offers vary by lender, credit profile, and vehicle. Always confirm the APR and any fees with your lender before signing.
How the Monthly Payment Formula Works
Every fixed-rate car loan uses the standard amortization formula: M = P [ r(1+r)^n ] / [ (1+r)^n - 1 ], where P is principal, r is monthly rate (annual rate divided by 12), and n is the number of payments. Early payments are interest-heavy; the split shifts toward principal over time. A $30,000 loan at 6.5% for 60 months, for example, produces a payment near $587 and roughly $5,200 in total interest. Changing any single variable moves the result fast. Drop the term to 48 months on the same loan and total interest falls by about $1,400, though the monthly payment rises. The calculator handles this arithmetic instantly, but understanding the formula keeps you from relying on a dealer's quote alone.
What Affects Your Interest Rate
Lenders price car loans on credit score, loan-to-value ratio, vehicle age, and term length. A borrower with a score above 750 will typically qualify for rates several percentage points below someone in the 600-650 range. Used-car loans almost always carry a higher rate than new-car loans because the collateral depreciates faster. Longer terms (72 or 84 months) may also push the rate up. Shop at least three lenders: your bank or credit union, the dealership's captive finance arm, and one online lender. Pre-approval letters let you compare on equal footing. Even half a percentage point matters. On a $25,000 loan over 60 months, the difference between 5.9% and 6.4% is roughly $370 in extra interest you never needed to pay.
Choosing the Right Loan Term
Shorter terms cost less overall but demand bigger monthly payments. A 36-month loan on $20,000 at 6% means paying about $608 a month with $1,900 in total interest. Stretch that to 72 months and the payment drops to around $331, but interest nearly doubles to $3,800. There is a practical ceiling too: if the loan term outlasts the vehicle's useful life, you risk owing more than the car is worth (negative equity). Most financial advisors suggest keeping the term at 60 months or less for new cars and 48 months or less for used ones. Run both scenarios in the calculator. If the shorter term forces a payment above 10-15% of your take-home pay, consider a less expensive vehicle rather than stretching the loan.
Reducing Total Interest Before You Sign
The simplest lever is a larger down payment. Every dollar you put down is a dollar that never accrues interest. Trading in a paid-off vehicle works the same way. Another tactic: make one extra payment per year directed entirely at principal. On a 60-month, $28,000 loan at 6%, a single annual extra payment of $500 saves roughly $600 in interest and shaves several months off the schedule. Check that your lender allows prepayment without penalty; most do, but some subprime contracts include a fee. Finally, watch the total-cost line more than the monthly figure. Dealers sometimes lower payments by extending the term, which feels cheaper but costs more. The amortization table above shows exactly where your money goes each month.
Frequently asked questions
Does a larger down payment always lower my monthly cost?
Yes. A bigger down payment reduces the principal, which lowers both the monthly payment and total interest. Putting 20% down instead of 10% on a $30,000 car cuts the financed amount by $3,000, saving hundreds in interest over the life of the loan.
Should I refinance my current car loan?
Refinancing makes sense when rates have dropped or your credit score has improved since the original loan. Compare the new total cost (remaining interest plus any refinance fees) against what you owe under the current terms. If the savings exceed the fees, it is worth pursuing.
How does a trade-in affect the loan calculation?
A trade-in reduces the amount you need to finance, just like a cash down payment. Subtract the trade-in value from the purchase price, then enter the net figure into the calculator. If you still owe money on the trade-in, subtract only the equity (value minus payoff).
Are 72- or 84-month loans a bad idea?
They lower the monthly payment but increase total interest and raise the risk of negative equity. If you must go beyond 60 months to afford the payment, the vehicle may be outside your budget. Run both terms in the calculator and compare the total-cost lines.