Auto Loan Payment Calculator in 2023
Most of the time, the interest rates on loans for used cars are also higher than those on loans for new cars. Use the boxes below to get an idea of how much your monthly auto loan payment might be.
Want to buy a new or used car? Use our car loan calculator to see what your monthly payment might be and how much interest you would pay over the life of the loan.
Cost of the car: How much you want to borrow to buy it. If you plan to make a down payment or trade-in, take that amount off the price of the car to figure out how much you will need to borrow.
Time: How long you have to pay back the loan. In general, the longer the term, the lower your monthly payment will be, but the more interest you’ll pay in total. On the other hand, if the term is shorter, your monthly payment will be higher and the total amount of interest you pay will be lower.
New/Used: Whether the car you want to buy is brand new or used. This can help you figure out the interest rate if you don’t know it (interest rates tend to be higher for used cars).
Interest rate is how much it costs to borrow money, shown as a percentage of the loan.
After you enter the information, the auto loan payment calculator shows you the results, which include the dollar amounts for:
Total monthly payment: The amount you’ll pay each month for the length of the loan. Part of each monthly payment goes to interest and part goes toward paying down the loan’s principal.
Total principal paid: The total amount you’ll borrow to buy the car.
Total interest paid: This is the total amount of interest you’ll pay on the loan. In general, the more time it takes to pay back a loan, the more interest you end up paying. Add up the amount of principal paid and the amount of interest paid to find out how much the car cost in total.
How is interest on a car loan worked out?
A car loan calculator tells you how much interest you’ll pay in total over the course of the loan. If the calculator has an amortization schedule, you can see how much interest you’ll pay each month. When you make a payment on a car loan, most of it goes toward the principal (the amount you borrowed) and some goes toward interest.
The amount of interest you pay each month is based on how much you still owe on the loan at that time. So, when the balance is high at the beginning of the loan, when you pay more interest. As time goes on and you pay off more of the balance, the interest part of your monthly payments goes down.
You can use a car loan calculator to figure out how much interest you owe, or you can do the math yourself. Here’s the standard way to figure out the interest on your car loan each month:
What’s a good interest rate on a car loan?
Interest on an auto loan can make the total cost of the car go up by a lot. At 6%, the interest on a $30,000 loan for 36 months is $2,856. At 6%, the interest on the same $30,000 loan paid back over 72 months would be $5,797.
Even small changes in your rate can have a big effect on how much interest you pay in the long run. At 5%, the total interest on a 72-month, $30,000 loan is $4,787. This is more than $1,000 less than the same loan at 6%.
So it’s best to look around for the best deal. Interest rates vary from lender to lender, and your rate also depends on things like:
Interest rates set by the Federal Reserve: When the Fed keeps rates low, it costs less to borrow money.
How good your credit is: In general, your interest rate will be lower the better your credit is.
Your ratio of debt to income (DTI): Your debt-to-income ratio (DTI) shows how much of your monthly gross income goes toward paying your monthly debts. If your DTI is low, your interest rate will be low as well.
Used car loans have higher interest rates than loans for new cars (because used cars have a lower resale value).
Term of the loan: Most of the time, interest rates are higher on loans with longer terms.
So, what’s a good interest rate on a car loan? Looking at averages is the best way to answer that question. According to Experian’s Q2 2021 State of the Automotive Finance Market report, here are the average loan rates for new and used cars by credit score: