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Car Loan Calculator
See the monthly payment, total paid and total interest on your car loan in seconds.
How is a car loan payment calculated?
A car loan is almost always a fixed-rate installment loan: you pay the same amount every month, split between principal and that month's interest. The standard formula is: the monthly rate equals the annual rate divided by 1,200, and the monthly payment equals the loan principal times the monthly rate, divided by (1 minus (1 plus the monthly rate) to the power of negative the number of months). The principal itself is the car price minus your down payment. The bigger your down payment or the shorter the term, the less total interest you pay over the life of the loan — even if the monthly payment goes up.
The number that matters more than the monthly payment is the total interest paid: the difference between everything you pay by the end of the loan and the principal you borrowed. On long, high-rate loans, this can equal the principal itself or more. Before signing anything, compare this figure against the dealer's or lender's official amortization schedule — some contracts add origination fees or mandatory insurance that this calculator does not include.
Frequently asked questions
Does this calculator include extra costs like insurance or origination fees?
No. This tool only calculates the principal and interest on the installment loan itself; insurance, origination fees, sales tax and other add-ons need to be added separately.
How does a bigger down payment affect the payment?
The bigger the down payment, the smaller the loan principal — which lowers both the monthly payment and the total interest paid over the life of the loan.
What happens if the interest rate is 0%?
In that case the monthly payment is simply the loan principal divided by the number of months, with no interest added.
Why does my total from the dealer or bank differ slightly from this number?
Banks and lenders sometimes use different interest calculation methods (such as periodic compounding or extra fees). This calculator shows a standard fixed-rate installment loan model.