Car Loan Payment Calculator (2024)

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Auto loans are a type of installment loan that split a car purchase into monthly payments over a period of years, which can make a new or used car more affordable. Auto loan terms typically run from 36 to 96 months, and the shorter the term, the less you’ll pay in interest.

Understanding the true cost of a car loan is especially important now that average loan terms have been growing, according to credit reporting agency Experian. In the fourth quarter of 2019, the average loan term on new cars purchased was just over 69 months. Use our auto loan calculatorto find your monthly payment, your total interest charges and your car’s overall cost.

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How To Use Our Car Payment Calculator

If you’re looking for a suitable auto loan to purchase a vehicle, a car payment calculator can offer insight into your monthly loan payments.

Follow these steps to use the Forbes Advisor car payment calculator:

  1. Enter your credit score. Begin by entering your credit score into the calculator. If you aren’t sure of your credit score, check your credit score for free—it has no impact on your score.
  2. Enter your vehicle’s price. Next, enter the total purchase price for the vehicle you’re looking to purchase. If you don’t have a specific vehicle in mind, you can play around with the calculator to determine your budget.
  3. Add your loan’s interest rate. If you already have a loan in mind or have received a loan offer, enter the value into the third box. If you don’t know your specific rate, enter the average interest rate for a car loan based on your credit score to determine your budget. If you don’t know both your rate and credit score, enter different rates to understand how it impacts the cost of your loan.
  4. Include your vehicle’s trade-in value/down payment. Your down payment or trade-in value can significantly impact your monthly payments over the loan term. In this box, enter your current vehicle’s trade-in value or your estimated down payment amount.
  5. Enter your term length. The calculator allows you to enter this value in monthly or yearly increments, depending on the specific terms of your auto loan. If you haven’t been approved for a loan, enter various term lengths to understand its impact on your monthly payment.
  6. Review your payment details. Once you enter all relevant information, click “Calculate” to generate your monthly payment, total interest paid and total amount paid. Below these values, there’s a drop-down menu that shows your amortization schedule and loan breakdown graph.

How To Get a Car Loan

Once you’re in the market to buy a new car, applying for a loan can be a complicated process, depending on where you look. To acquire a car loan, follow these general steps:

  1. Determine your budget. Before you shop for a loan, you must first determine your overall budget for purchasing a vehicle, making payments and handling expenses such as maintenance, fuel or insurance. Also, consider your current and future financial situation, which can impact your ability to handle payments and expenses.
  2. Check your credit score. Understanding your credit score can help you determine the type of loan you’ll have access to and your potential interest rate. Checking your credit score through free credit score monitoring websites requires a soft credit check, which has no impact on your score.
  3. Shop around for loans. Based on your budget and credit score, you should shop around for the best loan that meets your needs and payment capabilities. You can find auto loans from various sources, including dealerships, banks, credit unions and online lenders.
  4. Get preapproved. Preapproval can give you negotiating power when applying for a loan. It also allows you to set a reasonable budget before shopping for a vehicle.
  5. Select your desired vehicle. Once you have a solid idea of your budget, you can begin your search for a vehicle. It’s important to try different dealerships to ensure you find the best prices, rates and loan terms before making your decision.
  6. Finalize the auto loan. Once you select the vehicle and a loan, make sure that you check the details to ensure it matches your agreement. Also, ensure that you have filled out and received copies of all the required documents before you drive the vehicle off the lot.

What Is a Good Interest Rate On a Car Loan?

Car loan interest rates can be affected by a myriad of factors, including your down payment, credit score, vehicle type and loan duration. However, most borrowers try to find rates within or below the national average.

As of July 2023, the national average for a car loan interest rate is 6.58% for a new vehicle and 11.17% for a used vehicle. However, any interest rate below 6% is preferable. The best rates are typically reserved for highly qualified applicants.

Car loan interest rates are known to fluctuate on a consistent basis. For example, the average auto rate in June 2023 was 7.14%, which is a 0.56% decrease from July’s average. As such, it’s good practice to check auto interest rates daily to get the best estimate for your monthly payments.

How To Lower Your Car Payment

Whether you’re looking to refinance your loan or lower potential monthly payments before choosing a loan, there are many viable options to lower your monthly car payment, including:

  • Select a longer loan term. Longer loan terms usually come with smaller monthly payments but more interest over the life of your loan. Conversely, short-term loans typically have larger monthly payments; however, you’ll pay less interest overall.
  • Make a larger down payment. Whether you accumulate more funds or choose to trade in your previous vehicle, a larger down payment can reduce the size of your loan and your monthly expenses. A down payment of at least 20% is ideal for new cars. For used cars, a down payment of around 10% is recommended.
  • Refinance your current loan. Refinancing a car involves taking out a new loan with lower payments and a lower interest rate to pay off your existing loan. As a result, the monthly payments on your loan could decrease significantly.
  • Make additional or lump-sum payments. Although it will require more money upfront, paying a larger portion of your loan can reduce your monthly payments in the long run.
  • Lease your car. Car leases typically have lower monthly payments because you aren’t paying to own the vehicle. In the first quarter of 2023, the average car payment for a new, leased vehicle was $586. Comparatively, the car payment for a new, purchased vehicle was $725. When renting a used car, monthly payments can decrease further. The average payment for a used, leased car sat at $505 in 2023

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Frequently Asked Questions (FAQs)

How much car can I afford?

Start by determining how much of your monthly budget transportation costs should account for. One rule of thumb: Keep your total car expenses to 15% or less of your monthly take-home pay. So if you earn $3,000 a month after taxes, your all-in car costs—including auto loan payment, gas, maintenance and repairs and car insurance — should come out to no more than $450 per month. To save money, look into auto insurance discounts you may be eligible for.

What loan term length should I choose?

Avoid stretching out your loan term to keep your auto loan payment as low as possible. You’ll not only pay more in interest; you may also end up having negative equity, meaning you owe more on the car than it’s worth, for an extended period of time. Choose the shortest loan term you can manage while balancing other expenses like housing, savings and repaying other debts.

What determines my auto loan APR?

Your APR is based in large part on your credit score, and the higher your credit score, the more likely you’ll be to receive the most competitive rates. In the fourth quarter of 2019, borrowers with the lowest credit scores received an average APR of 14.25% on new car loans, while those with the highest credit scores received an average APR of 3.82%, according to Experian.

What factors determine the total cost of a car?

When you’re choosing a loan, the length of the loan term and the APR you receive will determine how much you pay in total. So will the down payment you make, and any money you receive for trading in your previous car. You’ll also need to pay for state taxes, title fees and potentially dealer-specific fees upon purchase, plus ongoing driving expenses.

Where can I get an auto loan?

Several types of lenders make auto loans, including car dealers, major national banks, community banks, credit unions and online lenders. You may get a particularly good deal from a lender you already have an account with, so check their rates first. Compare auto loan rates across multiple lenders to ensure you get the lowest APR possible.

How long do you have to pay off a car loan?

In 2023, the average auto loan term is 68.6 for new vehicles, 67.4 months for used cars and 35.3 months for leased vehicles. Car lenders typically offer loan terms ranging from 12 to 96 months—or one to eight years.

Missing payments or failure to repay your loan in the allotted time could result in negative credit reporting, an increase in fees, or repossession of your vehicle. To mitigate this, you could ask for a payment extension, or you can attempt to refinance your loan.

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Car Loan Payment Calculator (2024)


How to easily calculate car payment? ›

Car loan payment formula

Monthly payment = (loan amount) × (interest rate / 12) / (1 − (1 + (interest rate / 12)) ^ (-loan term)). The interest rate is given for a period of one year.

How much is a $35,000 car loan payment for 72 months? ›

If you take out a $35,000 new auto loan for a 72-month term at 4.0% interest, then your monthly payment will be $547.58. Although your monthly payments won't change during the term of your loan, the amount applied to principal versus interest will vary based on the amortization schedule.

How much is a $40,000 car loan payment for 84 months? ›

For example, a car buyer considering a $40,000 new car loan with an 84-month term at 9% APR would have a monthly car payment of about $623 and pay $12,369 in interest over the seven-year loan.

How much is a $30,000 car payment for 60 months? ›

If you took out a $30,000 new auto loan for a 60-month term at 5.0% interest, then your monthly payment would be $566.14. Note: Although your monthly payments won't change during your loan term, the amount applied to principal versus interest will vary based on the amortization schedule.

What is the rule of thumb for calculating car payment? ›

Financial experts recommend spending no more than 10% of your monthly take-home pay on your car payment and no more than 15% to 20% on total car costs such as gas, insurance and maintenance as well as the payment. If that leaves you feeling you can afford only a beat-up jalopy, don't despair.

How much should my car payment be if I make $60000 a year? ›

If your take-home pay is $60,000 per year, you should pay no more than $750 per month for a car, which totals 15% of your monthly take-home pay.

Is it smart to do a 72-month car loan? ›

Because of the high interest rates and risk of going upside down, most experts agree that a 72-month loan isn't an ideal choice. Experts recommend that borrowers take out a shorter loan. And for an optimal interest rate, a loan term fewer than 60 months is a better way to go. You can learn more about car loans here.

What credit score do I need for a $35000 car? ›

There is no set minimum FICO® Score to get a car loan. However, a good score at 720 or better will get you the best rate. Consider spending some time improving your credit score before shopping for your next car. Even moving up a few points can make a big difference if you have a low score.

What are the disadvantages of a large down payment on a car? ›

Disadvantages of a Larger Down Payment

The two biggest cons of making a down payment that's around 50 percent are: More money down doesn't lower your interest rate – Bad credit car buyers get higher than average interest rates, and it's extremely rare that a larger down payment can lower it.

Who has the lowest auto loan rates? ›

Compare Car Loan Rates
Top Auto Loan LenderLowest APROur Award
AutoPay4.67%**Best Auto Loan Rates
PenFed Credit Union5.24%Best Credit Union Auto Loan
Auto Approve5.24%**Best Auto Refinance Rates
Consumers Credit Union6.54%Excellent Credit Union Auto Loan
3 more rows

What does 2.9 APR for 72 months mean? ›

How Much Does 2.9% APR Cost? On a $40,000 SUV, a 60-month (5-year) loan at 2.9% would cost approximately $3,018 in interest. On a 72-month (6-year) loan, it would increase to $3,629. We've even seen 84-month financing incentives that could translate to $4,245 in interest.

What is a good APR for a car? ›

Car Loan APRs by Credit Score

Excellent (750 - 850): 2.96 percent for new, 3.68 percent for used. Good (700 - 749): 4.03 percent for new, 5.53 percent for used. Fair (650 - 699): 6.75 percent for new, 10.33 percent for used. Poor (450 - 649): 12.84 percent for new, 20.43 percent for used.

Are car payment calculators accurate? ›

Calculators Only Provide Estimates

Because they are dependent on the accuracy of the information you enter, they may be different than what a dealership will really offer you. The best use for these calculators is in helping you compare cars.

How much is a $25,000 car payment? ›

Example: A six year fixed-rate loan for a $25,000 new car, with 20% down, requires a $20,000 loan. Based on a simple interest rate of 3.4% and a loan fee of $200, this loan would have 72 monthly payments of $310.54 each and an annual percentage rate (APR) of 3.74%.

What is 6% interest on a $30,000 loan? ›

For example, the interest on a $30,000, 36-month loan at 6% is $2,856.

What is the formula for the monthly payment? ›

Monthly Payment = (P × r) ∕ n

Again, “P” represents your principal amount, and “r” is your APR. However, “n” in this equation is the number of payments you'll make over a year. Now for an example. Let's say you get an interest-only personal loan for $10,000 with an APR of 3.5% and a 60-month repayment term.

What is the formula for simple interest on a car payment? ›

Simple interest is relatively straightforward. Your outstanding principal balance is multiplied by the daily interest rate (your interest rate divided by 365) to calculate your interest payment.

How do you calculate car payment to income? ›

In general, it's recommended to spend no more than 10% to 15% of your monthly take-home income on your car payment, and no more than 20% on your total vehicle expenses, including insurance and registration. Read on to learn how you can determine how much car you can afford based on your financial situation.

What's a good down payment on a 30k car? ›

Consider putting at least $6,000 down on a $30,000 car if you're buying it new or at least $3,000 if you're buying it used. This follows the guidelines of a 20% down payment for a new car or a 10% down payment for a used car.

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