Auto Loan Calculator

Estimate a monthly car payment after down payment and trade-in.

How the Math Works

The auto loan calculator uses an amortization formula to determine your fixed monthly payment over the loan term. It first calculates the principal amount by subtracting your down payment and trade-in value from the car's total price. This principal is then multiplied by the monthly interest rate and divided by a factor that accounts for the total number of payments, ensuring equal portions of interest and principal are paid each month. This method ensures the loan is fully paid off by the end of the term while accounting for compounding interest.

Practical Applications

To use the calculator, input the car's total price, your down payment amount, trade-in value, annual interest rate, and loan term in months. The tool will automatically compute the adjusted principal and apply the amortization formula to show your exact monthly payment. This allows you to instantly compare different loan scenarios, such as varying down payments or interest rates, to find the most affordable option before visiting a dealership.

Day-to-Day Use

This calculator empowers you to budget effectively by revealing the true monthly cost of your vehicle purchase. Knowing your exact payment helps you plan finances, avoid overextending your income, and negotiate better terms with lenders. It also helps you understand how increasing your down payment or shortening the loan term reduces total interest paid, enabling smarter financial decisions that save money long-term while keeping your dream car within reach.

Worked example

$30k, $5k down, 7%, 5 yr → ~$495/mo.

FAQ