Auto Loan Calculator
How the payment is calculated
Your loan amount starts with the vehicle price, subtracts your down payment and trade-in value, then adds sales tax on the remaining balance (most buyers finance the tax rather than paying it upfront). That loan amount is spread evenly across your loan term using the standard amortization formula, based on your APR.
Like a mortgage, early payments in an auto loan are weighted more toward interest, with the principal portion growing each month. A shorter term means a higher monthly payment but less total interest paid over the life of the loan.
Down payment and trade-in
Every dollar you put down or bring in trade-in value directly reduces the amount you're borrowing — and therefore the total interest charged over the loan term. A larger down payment also helps you avoid owing more than the car is worth in the first year or two, when depreciation is steepest.
Term length trade-off
Stretching a loan from 60 to 72 or 84 months lowers the monthly payment, which can make a more expensive vehicle feel affordable — but it also means paying interest for longer on a depreciating asset. Compare the "total interest" figure above across a couple of term lengths before deciding.
Common questions
Your loan amount (price minus down payment and trade-in, plus sales tax) is spread across the loan term using the standard amortization formula, based on your APR. Each payment is the same amount, but early payments are mostly interest while later payments are mostly principal.
A common guideline is at least 10-20% down on a new car and 10% on a used car. A larger down payment lowers your monthly payment and total interest, and helps you avoid being underwater on the loan early on.
A longer term lowers your monthly payment but increases total interest paid, since you're borrowing the same amount for more months. A 72 or 84 month loan often costs significantly more in total interest than a 60 month loan at the same rate.
Most buyers finance sales tax along with the vehicle rather than paying it upfront, which is why this calculator adds it to the loan amount by default. Paying tax in cash instead lowers your loan amount and total interest.