way.com

Car Loan Calculator

LoanAffordabilityAuto Refinance

What auto can you afford? Use our car loan calculator and find out what you are looking at monthly, and how that is affected by factors like a trade-in, money down, or length of loan.

Let’s estimate your monthly car loan payment

Your estimated payment

$0/mo

Breakdown

Car price

$

Down Payment

-$

Trade-in value

-$

Estimated sales tax (0.00%)

+$

Other fees*

not included



Total loan amount

$

Total interest paid (over life of loan)

+$

Total loan & interest paid

$

Monthly payment

$

*This car loan calculator is for informational and general estimate purposes only, and doesn't include other fees which are factored into an auto lease or purchase, like title or taxes.

How Auto Loan Calculator Works

When comparing different interest rates for your auto loans, you can use our auto loan calculator to estimate the actual cost of your loan. First, you must provide the amount you want to borrow, APR, sales tax, and loan length. You can add the downpayment and the trade-in value if you want more precise estimates. Our auto loan calculator will provide you with an estimated monthly payment breakdown so you can figure out how much a car you can afford. As the estimate doesn't include any additional fees that your lender might ask for, your monthly payment can vary based on the lender you choose.

Here's more info on the information you should provide for the calculator to get an estimate:

Price of the Car You Want

In this field, you must enter the amount you expect to pay for the car.

To estimate the price of a new car, begin with the sticker price, also known as the MSRP. To calculate your final cost, simply deduct any savings you receive from dealer negotiations or manufacturer rebates. Next, include additional expenses like vehicle upgrades and other applicable fees while purchasing new cars.

Estimating the sale price of used cars can be a bit challenging. You can begin by considering the price your seller is asking for, but there may be room for negotiation to lower it. To determine a reasonable price, refer to online pricing guides or browse local online classified ads to find similar cars.

Down Payment (Optional)

In this field, you can input the total amount of money you intend to contribute towards purchasing the car. Some lenders don't require a down payment, but putting down at least 20% for a new car or 10% for a used car is wise.

We recommend contributing as much as possible without burning a hole in your pocket if you cannot afford this specific amount. Making a down payment, regardless of the amount, will reduce the amount you need to finance and the overall cost of the loan.

Trade-in Value (Optional)

The trade-in value refers to the amount the dealer is willing to offer for your car, while the retail cost is the price at which the dealer sells the car. You can also receive cash purchase offers from online retailers like CarMax, Carvana, or Vroom.

When using a pricing guide, it's important to check the trade-in value rather than the retail cost. These offers can be a starting point for your car-selling process and will decrease the amount you need to borrow.

Length of Loan

The loan term length refers to the amount of time, usually months, you will take to repay your auto loan. Typically, loan terms can be anywhere from 12 to 84 months and vary according to your lender.

If you choose to extend the duration of your car loan, it will reduce your monthly payments. However, it's important to note that you will pay more interest over time. There is also a possibility that you may end up owing more money on your loan than the actual value of your car.

Annual Percentage Rate (APR)

The interest rate is the percentage you will pay yearly to borrow money. The interest and annual percentage rates (APR) are not the same. The interest rate only represents the cost of borrowing, while the APR includes the borrowing cost and any additional fees.

Several factors can influence the interest rate that a lender may offer you. These factors include your credit scores and credit history, the loan amount, the loan term length, and the size of your down payment. Figure out the interest rate you are most comfortable with, and then use the following formula to calculate your auto loan APR.

APR = (Periodic Interest Rate * 365 Days) * 100

Where to Use Car Loan Calculator Results

Here are some ways to put the auto loan calculator results to good use:

When Comparing Loan Offers

You can decline the loan offered by a dealership or online car retailer. Instead, you can bring financing from a bank, credit union, or another lender. However, to minimize the impact on your credit score, applying for preapproved loan offers from multiple lenders within two weeks is better.

To compare monthly payments and total loan costs, input the necessary info from different loan offers into the auto loan calculator. When purchasing a vehicle from a dealership, bring the loan offer with the lowest interest rate and check if the dealer can provide a better offer. You can use the estimate the auto loan calculator offers as a reference.

When Deciding on a Loan Term

Lenders and car dealers frequently lower monthly car payments by extending the loan duration. If you're considering a lower payment for an auto loan, it's important to look beyond just the monthly amount. By using a calculator, you can get a better picture of the total cost of the loan, taking into account different loan terms.

Auto Loan Rates by Lenders 2023

Lender Estimated APR Loan amount Min credit score
Consumers Credit Union - Used car purchase loan 5.44-21.24% $7,500-No max. 620
LightStream - Used car purchase loan 6.49-12.49% $5,000-$100,000 660
MyAutoloan - Used car purchase loan 3.94-21.00% $8,000-$100,000 575
Carvana - Used car purchase loan 3.90-27.90% $1,000-$100,000 450
Capital One - Used car purchase loan N/A $4,000-Max. not disclosed Did not disclose
Autopay - Used car purchase loan 1.99-17.99% $2,500-$100,000 560
Bank of America - Used car purchase loan N/A $7,500-Max. not disclosed Did not disclose
CarMax - Used car purchase loan 2.95-26.00% $500-$100,000 None
PenFed Credit Union - Used car purchase loan 5.64-11.34% $500-$100,000 Did not disclose
Digital Federal Credit Union - Used car purchase loan 3.74-13.24% $2,500-$500,000 Did not disclose
Vroom - Used car purchase loan N/A $5,000-$100,000 Did not disclose
Chase Auto - Used car purchase loan N/A $4,000-Max. not disclosed Did not disclose
Consumers Credit Union - New car purchase loan 5.19-17.54% $7,500-No max. 620
MyAutoloan - New car purchase loan 3.69-21.00% $8,000-$100,000 575
LightStream - New car purchase loan 6.49-12.49% $5,000-$100,000 660
Capital One - New car purchase loan N/A $4,000-Max. not disclosed Did not disclose
Autopay - New car purchase loan 1.99-17.99% $2,500-$100,000 560
Bank of America - New car purchase loan N/A $7,500-Max. not disclosed Did not disclose
Digital Federal Credit Union - New car purchase loan 3.74-13.24% $2,500-$500,000 Did not disclose
PenFed Credit Union - New car purchase loan 4.44-10.19% $500-$100,000 Did not disclose
Chase Auto - New car purchase loan N/A $4,000-Max. not disclosed Did not disclose

What to Consider When Applying for an Auto Loan

With the number of options available, choosing the right auto loan for you can be quite overwhelming. It needs a lot of homework and research. While you are at it, here are some of the things to consider while applying for an auto loan:

Finalize a Budget

To begin with, figure out the amount of money you can comfortably afford to finance a car. Using tools such as an auto loan calculator can assist you in getting a better understanding. However, it is important to remember that owning a car involves more than just the initial purchase price. You should also consider additional expenses such as auto insurance, fuel, and maintenance fees.

It may be tempting but try not to extend your loan term just to lower your monthly car payment. You might pay thousands of dollars extra in interest throughout the loan if you don't pay attention.

Research and Shop Around

It's helpful to shop around and obtain loan estimates from multiple lenders to find a loan that suits your budget. Financing through a dealership may seem convenient, but you might pay a higher interest rate due to dealer markups.

Try getting quotes from various lenders such as banks, credit unions, and online lenders to make things easier. It allows you to compare their offers and find the best option. Getting prequalified or preapproved for a car loan can be beneficial. But it does not guarantee that you will receive a loan.

However, it can give you an idea of the loan amount, interest rate, and terms you may be eligible for. Please remember that the loan terms may change after you submit your complete auto loan application.

Explore the Available Alternatives

If you're having difficulty getting approved for a loan, one option to consider is finding a co-signer, as it increases the possibility of getting approved. If not, you still have a couple of options to consider. One option is to save more money for a bigger down payment. Another is to buy a cheaper car and focus on improving your credit.

How Is Interest Calculated on a Car Loan?

In most car loans, each payment is divided into two parts. One part goes towards the principal (the amount you borrowed), and the other goes towards the interest. The amount of interest you pay each month is determined by the loan's current balance.

During the initial stages of a loan, when the amount you owe is greater, you will be required to pay higher interest. As you make regular payments towards the balance, the amount of interest included in each monthly payment decreases. Here's how you calculate your monthly auto loan interest:

Monthly interest = (interest rate /12) × loan balance

What Is a Good APR for a Car Loan?

Your credit score highly influences the APRs you get. Borrowers with the highest credit scores (780 and 850) can expect rates around 4.75%, while those with lower scores (300 to 500) may face rates as high as 13.42%. Your auto loan's APR rates fall within the average limits, so they can be considered a good APR.

Average New Car Loan Rates by Credit Score

Credit Score Range Average New Car Rate
300 - 500 13.42%
501 - 600 10.79%
601 - 660 8.12%
661 - 780 5.82%
781 - 850 4.75%

Auto Loan Tips

Prepare for Additional Costs

The price you pay for the car will be more than what is displayed on the sticker on the car window. When calculating the cost of a vehicle, it's important to consider additional expenses like taxes, title fees, and future vehicle maintenance.

A Longer-Term Loan Might Not Be Worth It

The repayment terms for loans can vary from 24 to 84 months. Choosing a longer loan term will help you with the monthly payments but not with the interests. Additionally, it's important to consider that opting for a longer term could result in you being committed to the same vehicle for up to seven years.

Consider Refinancing Your Current Car Loan

Refinancing your current loan is a great option if you want to save money and keep your vehicle. If you initially signed off at a dealership or if your credit has improved, you may want to consider this option. It could potentially offer you a better interest rate and loan term.

Save for a down payment

It's helpful to have a down payment ready to lower the overall amount you need to finance. Experts typically recommend a down payment of 20 percent when buying a car. However, purchasing a car with a down payment of as low as 10 percent is possible. If you borrow less money, you will save more on interest.

Buying Vs. Leasing

Buying means acquiring ownership of an asset or property. Meanwhile, leasing is when someone is permitted to use an asset or property on behalf of the owner.

Leasing a vehicle means paying to use it for a specific period of time. Most leases typically last for either 24 or 36 months, although it is possible to find even longer leases. There are limitations on the number of miles you can drive and the modifications you can make to your vehicle. There will be different fees that you need to pay. After your lease period is over, you can either return the vehicle to the dealer or buy it at a predetermined price stated in the lease contract.

When you purchase a car, you automatically become the owner. If you pay for something with cash or finance your purchase and fully repay the loan, you will own it. You have complete control over the vehicle and can choose to keep it, trade it in, sell it, or give it away.

How to Decide between Buying and Leasing

Before taking a car from the dealership, you should consider whether you should lease or buy it. When considering a vehicle, there are three main factors to consider.

First, think about how many miles you drive each year. Second, consider the purpose of the vehicle. And finally, determine how much you can comfortably spend every month. Buying may be the best option if you want complete ownership of the vehicle and can afford a higher monthly cost. If you value the ability to choose from different types of vehicles and can adhere to the mileage limit, leasing might be the best option for you.

Leasing a vehicle is similar to buying one, as you will make monthly payments throughout your contract. When you make a purchase, there is hope for a brighter future where you won't have to make any more payments. If you choose to lease a car without planning to buy it, you will have to keep making monthly payments without ever owning the car.

Frequently Asked Questions

When is the best time to buy a car?

Typically, buying a car on a weekday rather than a weekend is better because you can usually get a better deal. Remember to take advantage of holiday sales, especially towards the end of the year. Dealerships receive their new model year inventory in the fall. This means that if you're in the market for a new car, you might be able to find a good deal in the current model year

Should I buy new or used?

When you buy a new car, you get to enjoy the freshness of a brand-new vehicle and experience its latest features. However, they come with a higher price, depreciate faster, and have more costly insurance. When you buy a used car, it usually costs less and loses value at a slower rate.

However, it's important to note that you may not know how the previous owner drove or cared for the car. Compare the advantages and disadvantages of new and used cars using a new vs. used car calculator.

How can I get the best deal on car financing?

Getting the best auto loan deal requires preparation. Exploring and comparing at least three loan options is important to make an informed decision. This includes considering financing options from the dealer, banks, credit unions, and online lenders. Make sure to carefully consider the interest rates, terms, and fees that each lender is offering.

Are auto loan rebates a good idea?

By taking advantage of an auto loan rebate, you can save significant money when buying a car. This rebate can reduce your vehicle's purchase price by hundreds or even thousands of dollars.

Typically, the rebate amount is used to lower the down payment or cover the closing costs of your car loan. The availability of rebates depends on the dealer and may only apply to certain makes, models, or trim packages. It could be a good idea if car accessories were available for a vehicle you're already interested in.

What is auto loan interest?

Auto loan interest refers to the amount of money you must pay to borrow funds to purchase a car. Lenders charge a price that enables you to make payments for the car over a period. Your monthly payment consists of two parts. One part goes towards repaying the borrowed money, and the other covers accumulating interest while you pay it back.

How do car loans work?

Car loans allow individuals to purchase a car without paying the full amount upfront. When you get a car loan from a bank or other financial institution, you borrow the money you need to buy the car. Then, you repay the loan gradually, along with an annual interest rate.

What's the term for a car loan?

The car loan term refers to the duration you will repay the borrowed money. The duration usually varies from 12 to 84 months, increasing by 12-month intervals.

What's the interest rate on a car loan?

The car loan interest rate is the annual percentage of the money you borrow for financing. The interest rate is the cost you incur when you borrow money from a financial institution.

What's the sales tax on a car purchase?

Sales tax is a percentage of a car's price that you must pay to your state. Certain states file tax on the full price of the car, while others don't charge any tax at all. However, in most states, there is an allowance for a trade-in credit that can be used to reduce the taxable amount of a car purchase.

Where can I get a car loan?

You can get car loans from automakers, credit unions, banks, and financial companies.

What's the trade-in value of a car?

A car's trade-in value is the money a dealership is willing to pay for your car when you buy a new one.

Can I pay off a car loan early?

If it makes sense for your situation, you can usually pay off a car loan early. However, before doing so, check your financial documents to ensure there are no penalties for prepaying the loan.

Can I refinance a car loan?

Certainly, it is possible to refinance a car loan. However, it is important to carefully evaluate the financial implications before proceeding with the refinancing process.