Auto Loan Calculator — Free Monthly Car Payment Tool

Your monthly payment uses the same standard amortizing loan formula as a mortgage: payment = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the amount financed, r is the monthly rate (APR divided by 12), and n is the total number of monthly payments. For example, a $28,000 loan at 6.5% APR over 60 months produces a monthly payment of approximately $547.

Your down payment and trade-in value reduce the amount you need to borrow directly. If you put $4,000 down and trade in a vehicle worth $6,000 on a $30,000 car, you only need to finance $20,000 — saving you hundreds in total interest compared to financing the full purchase price.

Choosing a longer term (say 84 months vs 48 months) lowers each monthly payment but dramatically increases the total interest you pay. On a $25,000 loan at 6.5%, a 48-month term costs roughly $1,700 in total interest while 84 months costs about $3,000 — nearly double. Shorter terms cost more each month but less overall.

New car loans typically carry lower interest rates than used car loans because lenders view new vehicles as lower risk — they have no prior ownership history and are covered by manufacturer warranty. The rate gap between new and used is often 1–3 percentage points, though it narrows for newer used vehicles (1–2 years old).

Your credit score is the biggest factor in the rate you are offered. Borrowers with scores above 720 typically receive the best available rates, while those below 580 may face rates two to three times higher. If your credit needs improvement, consider waiting a few months to build your score before applying — even reducing your rate by 1% can save hundreds over the life of the loan.

Shorter loan terms generally come with lower interest rates than longer ones. A 36-month loan will often carry a rate 0.5–1% lower than a 72-month loan from the same lender. Always compare the total cost of the loan — not just the monthly payment — when choosing a term.