Car Loan Calculator
This car loan calculator shows your monthly auto loan payment, total interest, and the true cost of financing a car. Whether you call it a car loan (India), an auto loan (US) or car finance (UK), the maths is identical: enter the amount you are financing after down payment and trade-in, the APR, and the term — and see instantly whether the deal in front of you is good or expensive.
On-road price minus your down payment and any trade-in value. Do not forget taxes and registration get financed too if you roll them in.
The APR from your loan quote. New-car rates are lower than used-car rates; dealer finance is often pricier than a bank pre-approval.
1–7 years. Shorter terms cost less overall. Avoid terms beyond 5 years — cars depreciate faster than long loans amortize.
Monthly payment
$593
What you'll pay every month for the loan term — e.g. $592.61/month financing $30,000 at 6.9% APR over 5 years.
The pure financing cost on top of the car's price — this is what stretching the term or shopping for a lower APR actually saves you.
Amount financed plus total interest — what the car really costs once every payment is made, before adding your down payment.
The amount you're borrowing after down payment and trade-in — shown for quick comparison against the totals above.
How to use this car loan calculator
- 1Loan amount: on-road price minus down payment minus trade-in. If the car costs $35,000, you put $5,000 down and your trade-in is worth $3,000, you finance $27,000 — not $35,000.
- 2Interest rate: get a pre-approval from your bank or credit union BEFORE the dealership, and enter that APR here. It gives you a benchmark the dealer must beat.
- 3Loan term: slide from 3 to 7 years. Watch how little the monthly payment falls after 5 years while total interest keeps climbing — that is the dealer's favourite trap.
- 4Compare the total cost of loan figure against the cash price: the difference is what financing really costs you.
Understanding your results
The monthly payment is what salespeople negotiate on — never shop by it alone, because stretching the term can make any car 'affordable' while costing you thousands more. Total interest is the honest metric: on a $30,000, 5-year loan at 6.9% you pay about $5,550 in interest; stretch to 7 years and it is $7,900. Total cost of loan plus your down payment is the real price of the car. If the payment only fits your budget at 72 or 84 months, the car is too expensive — a cheaper car on a shorter term is almost always the wealth-building choice, because cars lose value faster than long loans build equity.
The formula
Payment = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)P is the amount financed, r the monthly rate (APR ÷ 1200), n the number of months. Auto loans are simple-interest, reducing-balance loans: each payment covers the month's interest first, and the remainder cuts the principal. There is typically no prepayment penalty on bank auto loans in the US or on floating-rate loans in India, so paying extra principal early shortens the loan and saves interest directly. In the UK, check whether your quote is a personal loan (this formula) or PCP/HP — PCP defers a balloon payment and needs a different calculation.
A worked example
A $30,000 auto loan at 6.9% APR for 5 years: monthly rate 0.575%, 60 payments, payment = $592.61. Total paid: $35,556 — interest of $5,556. The same loan over 7 years drops the payment to $451 but lifts interest to $7,890. And a 84-month loan on a car that will be worth $12,000 by year six leaves you underwater for most of the term. Now try a bigger down payment: $10,000 down on the same car cuts the financed amount to $20,000, the payment to $395, and interest to $3,704. Down payment size beats rate haggling almost every time.
Notes for the UK, US and India
In the US, credit unions routinely beat dealer APRs by 1–2 points, and most states cap or ban prepayment penalties. In India, car loans run 8–12% with tenures up to 7 years; dealers push flat-rate quotes — a 6% flat rate equals roughly 11% reducing, so convert before comparing. In the UK, distinguish HP (you own the car at the end — this calculator applies) from PCP (lower payments, balloon at the end — different maths). Everywhere: GAP insurance and add-on warranties rolled into the loan also accrue interest, inflating every figure on this page.
Frequently asked questions
How much car can I afford?+
The 20/4/10 rule is a solid guide: 20% down, a term of no more than 4 years, and total transport costs under 10% of gross income. Enter your numbers above — if you need a 6- or 7-year term to afford the payment, choose a cheaper car.
Is it better to finance through the dealer or a bank?+
Get a bank or credit-union pre-approval first, then let the dealer try to beat it. Dealers sometimes offer genuinely subsidised rates on new cars (0–2.9% promotions), but only on specific models and usually with shorter terms.
Should I take a longer loan term for a lower payment?+
Rarely. Beyond 5 years the monthly saving shrinks while interest balloons, and you risk owing more than the car is worth for years. A $30,000 loan at 6.9% costs $5,556 interest over 5 years but $7,890 over 7.
What is the difference between flat rate and reducing balance on car loans?+
Flat rate charges interest on the full original amount for the whole term; reducing balance charges only on what you still owe. A 6% flat rate costs about the same as an 11% reducing rate. Indian dealers often quote flat rates — always convert.
Can I pay off my car loan early?+
Usually yes. US bank auto loans rarely have prepayment penalties; Indian floating-rate loans have none by regulation, though some fixed car loans charge 2–5% foreclosure fees. Check your agreement — then verify the saving here by shortening the term.