calcfig
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Car Loan Calculator

Work out the monthly payment on a car loan from the amount, rate and term, see the total interest, and test what an extra payment each month saves.

$

The amount you borrow, after any deposit or trade-in.

% a year

A placeholder, not a quote. Use the rate from your lender.

years
$

Paid off the loan today, for example from savings or a bonus.

$

Added to every repayment. It shows the interest and time saved.

$

Ongoing account fees. Added to the total cost, not to the loan.

Monthly repayment$693.04
Total interest$6,582.52
Total repaid$41,582.52

$35,000.00 at 7% a year is 0.5833% a month (rate ÷ 12) over 60 payments. Payment = loan × r ÷ (1 − (1 + r)^−n) = $693.04. 60 × $693.04 = $41,582.52 repaid, less the $35,000.00 borrowed = $6,582.52 interest.

Principal and interest only. Fees are not included. Balloon payments, insurance and rate changes are not included. Check the figure with your lender.

Fig. 1 Your repayment, and what the loan costs.

Every formula is tested against worked examples. How we check

TermMonthly repaymentTotal interest
3 years$1,080.70$3,905.14
4 years$838.12$5,229.69
5 years$693.04$6,582.52
6 years$596.72$7,963.50
7 years$528.24$9,372.48

Fig. 2 The same loan and rate over different terms.

Guide

How the repayment is worked out

Interest is charged each month at the yearly rate divided by 12. The level repayment that clears the loan over n payments is loan × r ÷ (1 − (1 + r)−n), where r is the rate for one period.

For example, $35,000.00 at 7% over 5 years is $693.04 a month. That is 60 payments, $41,582.52 in all, so $6,582.52 of it is interest. The amount, rate and term here are placeholders, not a quote.

Term, rate and total cost

A longer term lowers the payment but costs more interest. On the example, stretching 5 years to 7 years lowers the payment to $528.24 a month but raises the interest to $9,372.48. Shortening it to 4 years makes the payment $838.12 and the interest $5,229.69. A rate one point higher (8%) makes the payment $709.67. The table under the result compares terms for your own figures.

Extra repayments

Anything you pay above the payment reduces the amount you owe, so less interest is charged from then on. An extra $100 a month on the example pays the car loan off in 4 years 4 months instead of 5 years, and saves $997.14 of interest. Put an amount in the extra box to try your own, or a one-off amount to pay now.

Some lenders charge a fee for extra or early repayments, especially on fixed-rate loans, so ask yours.

What is not included

Sales tax, title and registration fees, insurance and add-ons are not included, and they are usually paid separately or rolled into the amount you borrow. Use the fees box for ongoing account fees. Enter the amount you actually borrow, after any deposit or trade-in.

Common questions

How much extra should I pay?

Any extra helps. On $35,000.00 at 7% over 5 years, an extra $100 a month saves $997.14 of interest and shortens the loan by 8 months. Check first that your lender allows it.

Why is so much of the early payment interest?

Interest is charged on the whole balance. In the first month of the example, $35,000.00 at 7% a year is $204.17 of interest, so only $488.88 of the $693.04 reduces the loan.

Is the interest rate fixed?

This assumes the same rate for the whole term. If your rate is variable, run it again with the new rate, the balance owing and the years left.

Does this include insurance and registration?

No. It is the repayment of principal and interest on the amount you borrow. Insurance, registration and taxes are separate.

What next?