Car Loan Calculator

A car loan calculator is a tool you can use to analyze your car loan options before making a purchase. With a calculator, you can determine how large a loan you can afford to take on and, as a result, how much car you can afford. It can also be used to ensure the dealership or lender you finance your new or used car with isn’t trying to inflate your monthly payment.

Most auto loan calculators ask for standard information, such as:

• Price of the car you wish to purchase
• Down payment (if any)
• Credit score
• Interest rate
• Loan term

Keep in mind that an auto loan payment calculator likely can’t tell you what loan terms you qualify for based on this information. You may or may not find similar terms from the dealership, bank or credit union you finance your car purchase with.

Factors That Affect Car Loan Rates

Several factors will impact your auto loan rate from a dealership or third-party lender, including:

• Credit history
• Loan term
• Loan amount
• Debt-to-income ratio
• Age of the vehicle you wish to purchase
• Down payment amount
• Lender
• Current market rates
• Current dealership promotions

Note that new cars typically have lower rates than used cars because they are less risky for lenders. Making a larger down payment may also get you a lower auto loan rate.

An auto loan calculator considers the car price, loan term and interest rate to tell you what your monthly payment would be. You can adjust factors in the calculator, such as how many months you want to pay your car loan, to see how your monthly payment would change. We explain the parts of a car loan calculator in further detail below.

• Car price: With some calculators, you’ll only enter the amount you want to borrow. If a calculator also asks for the purchase price of the vehicle, subtract the value of any down payment, trade-in or manufacturer or dealer discounts and rebates. This will determine the total loan amount.

• Loan term: This is the number of months you have to repay your car loan. In general, choosing a longer term will lower your monthly payment, but you’ll pay more in interest. Having a shorter loan term means a higher monthly payment but less interest paid overall.

• Interest rates: Some auto loan calculators ask for your credit score to help determine what interest rate you may qualify for. If the calculator you’re using doesn’t include this feature, you can check online lenders and banks for rates.

• Trade-in value and down payment: Enter the total cash value of your current vehicle or the amount of your down payment in these fields. You can use reputable websites like Kelley Blue Book or CarMax to find your vehicle’s trade-in or resale value.

After you input the details above, the auto loan calculator will typically display the following results:

• Monthly payment: This is the amount you would pay each month for the duration of your car loan. Part of each monthly payment goes toward the actual amount owed, called principal, and the other part goes toward interest.

• Principal amount: This is the amount of money you’ll borrow to finance your auto purchase.

• Total interest paid: This is the total amount of interest you’ll pay over the life of the loan. The longer the loan term or the higher the interest rate, the more you’ll pay.

What are Average Auto Loan Rates?

The auto loan rates you’re offered depend largely on your credit score. Borrowers with credit scores higher than 660 tend to receive lower interest rates than those who have credit scores below that number.

The graph below shows average interest rates for new and used cars, according to Experian’s Q2 2022 State of the Automotive Finance Market report.

Here are explanations of some popular auto loan terms you may see when using a car loan calculator or shopping around for auto loan rates:

• Purchase price: This is the actual amount you pay to purchase your vehicle, after any discounts or rebates. This differs from your loan amount. To help you figure out how much you can spend on your vehicle purchase, our experts recommend that your monthly auto loan payment be no more than 10% to 15% of your take-home pay. Your total monthly costs for your vehicle, including insurance, should total no more than 20% of your monthly income.
• Down payment: Saving more money before purchasing a car can make the overall cost more affordable. Placing a down payment on your new or used car will allow you to have a lower interest rate, reduced monthly payments and a shorter loan term.
• Interest rate vs. annual percentage rate (APR): The interest rate is the percentage the lender charges for the loan, while the APR combines the interest rate with any up-front fees.

A car loan calculator can show you your potential monthly payment, as well as the bigger picture of how much you’ll pay for your new or used car overall. However, there are other costs beyond simply your interest rate.

How to Calculate APR on a Car Loan

In many cases, car loan calculators don’t reflect state and local sales taxes or registration fees. Remember, your APR is a combination of your interest rates and any fees or discounts your lender includes. Other variables often left out of car loan calculators include:

• Application fee: Some lenders may charge a fee for submitting a loan application. 
• Origination fee: This is a flat fee or a percentage of the loan amount that the lender charges for processing a loan. 
• Payment-related fees: This includes late fees, returned-check fees and fees for certain payment methods. 
• Prepayment penalty: Some lenders charge a fee if you pay your car loan off early. It’s meant to give the lender some of the money it would lose out on by not collecting interest for the duration of your original loan term.
• Discounts: Your lender may offer a discount, such as for setting up automatic payments. This is included in your APR.

You can search online to find out about lenders’ fees or contact them directly to learn about costs in your area.

An auto loan calculator can also be used to compare lender offers and try different interest rates and loan terms. The knowledge you gain from using this tool can help you negotiate a fair deal with a lender or dealership to get the best auto loan rate for your situation.

When you want the best auto loan rates, a car loan estimator is a great resource for making comparisons. We recommend checking out Auto Approve and myAutoloan, both of which ranked high in our review of the best auto loan rates of 2024.

Auto Approve: Top Choice for Refinancing

Auto Approve is one of our top choices for the best auto loan rates. It has a strong reputation among industry organizations as a refinance auto loan specialist. The company’s lease buyout option makes it a viable choice for people looking to purchase vehicles. Auto Approve rates start at 6.24% APR for refinancing, though only borrowers with high credit scores can access these rates. 

Read more: Auto Approve review

myAutoloan: Most Popular Marketplace

Acting as an online marketplace, myAutoloan lets you comparison shop for the best auto loan rates from many lenders. You can enter your personal information into its online form and receive instant loan offers. Borrowers can find APRs as low as 6.99% for new auto loans, 7.24% for used auto loans and 5.49% for refinancing. The company has strong customer service ratings, earning an A+ rating from the Better Business Bureau and a 4.0-star rating out of 5.0 from Trustpilot.

Keep reading: myAutoloan review

Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best auto loan companies. We collected data on dozens of loan providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the companies that scored the most points topping the list.

Here are the factors our ratings take into account:

• Reputation (25% of total score): Our research team considered ratings from industry experts and each lender’s years in business when giving this score.
• Rates (25% of total score): Auto loan providers with low APRs and high loan amounts scored highest in this category.
• Availability (25% of total score): Companies that cover a variety of circumstances are more likely to meet consumer needs.
• Customer Experience (25% of total score): This score is based on customer satisfaction ratings and transparency. We also considered the responsiveness and helpfulness of each lender’s customer service team.

*Data accurate at time of publication.