Car Loan Calculator — Monthly Payment & Total Interest
Calculate your estimated auto loan payments, breaking down the principal and total interest over the life of the loan.
Car Loan Calculator
Estimates monthly payment for a fixed-rate car loan (principal + interest only).
About this tool
The Car Loan Calculator computes your monthly payment, total interest paid, and total repayment cost for any auto loan. Enter the vehicle price, your down payment, the annual interest rate, and the loan term — the calculator instantly shows your monthly EMI and the full cost breakdown.
Unlike most loan calculators, this tool also shows you how much of the car you are actually financing versus paying in interest — helping you make an informed decision before visiting a dealership.
Common use cases
- Comparing monthly payments across different loan terms (3, 5, 7 years)
- Calculating the real cost of a car loan vs paying cash
- Finding how much car you can afford based on a target monthly payment
- Comparing dealer financing vs bank financing
How to use
- Enter the vehicle price (the total cost of the car).
- Enter your down payment (amount you will pay upfront).
- Confirm the loan amount (Price minus Down Payment).
- Enter the annual interest rate (check your bank or dealership offer).
- Select the loan term in months (36 = 3 years, 60 = 5 years, 84 = 7 years).
- Review monthly payment, total interest, and total amount paid.
This page is available at /tools/car-loan-calculator/.
Understanding the result
- Monthly payment: the fixed amount you pay each month for the loan term. Car loans use amortisation — early payments are mostly interest, later payments are mostly principal.
- Total interest: the total extra cost of borrowing. On a $25,000 car loan at 8% for 5 years, total interest is about $5,400 — you pay $30,400 for a $25,000 car.
- Loan term vs monthly payment: a longer term (7 years) means lower monthly payments but significantly more total interest paid.
- The car depreciates while you repay: most cars lose 15–25% of value in year one and 50% by year 5. You may owe more than the car is worth early in the loan (being 'underwater' or 'upside down').
Related tools
FAQ
What is a good interest rate for a car loan?
Rates vary by credit score and country. In the US, excellent credit (720+) typically gets 4–7% APR. Average credit (630–720) gets 8–13%. Dealer financing is often higher than bank or credit union financing. Always compare at least 2–3 lenders before accepting any offer.
Should I choose a longer or shorter loan term?
Shorter terms (36–48 months) cost less in total interest but have higher monthly payments. Longer terms (60–84 months) lower monthly payments but significantly increase total interest paid and the risk of being underwater on the loan. Most financial advisors recommend keeping car loans under 60 months.
What is a down payment and how much should I put down?
A down payment is the upfront cash you pay toward the car, reducing the loan amount. A larger down payment means lower monthly payments and less interest. Aim for at least 10–20% down. Putting nothing down on a new car often means being immediately underwater as the car depreciates.
How does this differ from an EMI calculator?
Both calculate monthly instalment payments on loans. This calculator is specifically designed for auto loans with fields for vehicle price and down payment. An EMI calculator is more general purpose for any loan amount and term.
Can I use this to compare dealer financing vs bank financing?
Yes. Run the calculator twice — once with the dealer's interest rate and once with your bank's rate. Compare the total interest paid over the loan term to see the true cost difference.