Car loan calculator
Monthly installment and total interest from price, down payment and rate.
Reference calculation based on equal principal-and-interest installments. Additional costs such as acquisition tax, insurance and delivery fees, as well as deposit/balloon-payment terms, are excluded.
You have settled on a car, the dealer quotes a monthly figure, and you want to know whether that number actually follows from the price and the rate you were given. This calculator rebuilds the payment from scratch: enter the vehicle price, what you are putting down, the annual interest rate and how many months you want to spread it over.
It shows the monthly installment and how much of the total you end up paying in interest, so you can compare a shorter term against a longer one before signing anything.
How it works
What the calculator does
It assumes an equal principal-and-interest loan — the standard amortizing structure where every monthly payment is identical, but the split between interest and principal shifts over time. Early payments are mostly interest; later ones are mostly principal.
The amount financed is simply the vehicle price minus your down payment. The monthly payment then follows the annuity formula:
M = P x i / (1 - (1 + i)^-n)
where P is the amount financed, i is the monthly rate (annual rate / 12 / 100), and n is the term in months. Total interest is M x n - P.
Reading the result
| Input you change | What happens |
|---|---|
| Larger down payment | Lower monthly payment, less total interest |
| Longer term | Lower monthly payment, more total interest |
| Higher rate | Both go up |
The longer-term trade-off is the one people underestimate. Stretching 36 months to 60 makes the monthly number look comfortable while quietly adding to what the car costs you overall.
What is not included
Acquisition tax, registration, insurance, delivery fees and dealer add-ons are excluded, as are deposit or balloon-payment structures where a large lump sum is deferred to the end of the term. Lenders may also apply origination fees or round payments differently, so treat the output as a reference figure and confirm the final schedule with the lender.
Terms explained
- Amount financed
- The vehicle price minus your down payment - the sum the loan actually covers.
- Down payment
- Cash paid up front. It reduces the financed amount, so it lowers both the monthly payment and the total interest.
- Annual interest rate
- The nominal yearly rate on the loan. The calculator divides it by 12 to get the monthly rate.
- Term (months)
- How long you repay over. A longer term means smaller payments but more interest overall.
- Equal principal-and-interest
- An amortizing schedule where every monthly payment is the same amount, with the interest/principal mix changing month to month.
- Balloon payment
- A large final lump sum deferred to the end of the contract. Not modeled here.
Frequently asked questions
Why is the dealer's monthly quote different from this result?
Dealer quotes often bundle in insurance, registration, warranty products or a deferred balloon payment, and some use a different rate structure than the nominal one advertised. This calculator prices only the loan itself, so a gap usually means extra items are folded into the quote. Ask for an itemized schedule to see what the difference is made of.
Should I choose a longer term to lower the monthly payment?
A longer term always lowers the monthly amount and always raises the total interest. Run both terms in the calculator and look at the total interest line: if the extra cost over the full term is small relative to the breathing room it gives your monthly budget, the trade may be worth it. If it is large, a shorter term or a bigger down payment is usually cheaper.
Does the calculator handle early repayment?
No. It assumes you pay exactly the scheduled installment every month to the end of the term. Paying off early reduces total interest, but many contracts apply a prepayment penalty during an initial period, so check your agreement for the exact terms.
Is the interest rate here monthly or annual?
Enter the annual nominal rate. The calculator converts it internally by dividing by 12 to get the monthly rate used in the payment formula.
Are taxes and fees included in the total?
No. Acquisition tax, registration costs, insurance and delivery or dealer fees are all excluded. Budget for those separately on top of the figures shown here.
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