How it works
P is the amount financed, r is the monthly interest rate, and n is the number of scheduled monthly payments. The calculator assumes the same rate throughout the term and payments at the end of each month. Interest is calculated on the outstanding balance; the rest of each payment reduces principal.
Each schedule row rounds interest and payment to cents. The final installment clears the remaining balance. Extra payments are applied to principal after that month’s interest and can shorten the loan. The quoted regular payment remains visible so that you can distinguish the required payment from your voluntary overpayment.
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Enter price, down payment, interest rate, and term.
We calculate
Standard amortization estimates monthly payments.
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Check interest, principal, and the full schedule.
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Adjust the numbers to explore another scenario.
The formula behind the estimate
Every result starts with a defined model and visible assumptions.
P = price + financed fees + old loan payoff − down payment − trade allowance r = annual interest rate ÷ 1,200 M = P × r ÷ (1 − (1 + r)^(−n)) At 0% interest: M = P ÷ n
A worked example
A $25,000 car with $5,000 down, no trade or financed fees, and a 7% annual interest rate creates a $20,000 loan. Over 60 months, the estimated regular payment is $396.02. These inputs are illustrative; 7% is not a current offer. Adding $100 per month pays down the balance sooner and reduces the modeled interest.
Read the rate and the term together
APR and the contract interest rate are related but not always identical. APR includes certain borrowing costs, while the monthly calculation needs the rate used to accrue interest. Enter the contract interest rate when available. If you only know APR, treating it as the interest rate gives an approximation, particularly when prepaid fees are material. Compare the lender’s Truth in Lending disclosures before signing.
A longer loan spreads principal over more months. That usually lowers the required payment but increases total interest when the rate and amount are unchanged. It also leaves the balance outstanding longer. Use the term comparison to decide whether a smaller purchase or a larger down payment is more useful than stretching the repayment period.
Why your lender’s schedule may differ
Many auto loans accrue simple interest daily. The number of days between payments, the first due date, and late or early payments can change the allocation. This tool uses monthly periods, so its schedule is a budgeting estimate rather than a payoff statement. Do not send a final payment based only on the last row.
If a trade is worth less than its payoff, the negative equity is added to the new amount financed. That can leave you owing more than the replacement car is worth. Compare the new loan balance with a conservative resale estimate and consider whether postponing the purchase reduces that risk.
Questions worth asking
Can I calculate a 0% loan?
Yes. At zero interest, principal is divided by the term. The last payment reconciles rounding. Confirm whether choosing a promotional rate means giving up a rebate.
Are sales tax and dealer fees included?
Only the amounts you enter in financed taxes and fees. Cash-paid fees should not be added to the loan. Use the tax estimator as a separate planning step.
Does an extra payment reduce the regular payment?
Not in this model. It reduces the balance and can shorten payoff time. A lender may handle prepayments differently; ask about principal-only application.
What happens when I owe more than my trade is worth?
The payoff minus trade allowance increases the financed amount. For example, a $5,000 trade with an $8,000 payoff adds $3,000 before other purchase costs.
Is this a loan approval or rate quote?
No. The tool does not check credit, contact lenders, or retrieve offers. Eligibility and contract terms require an actual lender decision.
This is general information, not personalized financial advice. Read the limitations.