HesapHanem

Auto Loan Calculator

Enter the loan amount, annual interest rate, and term in months to find the monthly payment.

Result

$483.32
$3,999.20
$28,999.20

How it is calculated

The tool converts the annual rate to a monthly one and applies the level-payment formula: r = annual_rate / 100 / 12, payment = L × r / (1 − (1 + r)−n), where L is the amount you borrow (in dollars), r the monthly rate and n the number of monthly payments. Total paid is payment × n and total interest is total paid minus L. If the rate is exactly 0 the payment is simply L / n. The loan amount must be above zero and the term at least 1 month, otherwise there is no result. Fees, taxes, insurance and a down payment are not modelled: enter the amount actually financed.

Worked example

Borrow 25000 at 6% for 60 months. Monthly rate: 6 / 100 / 12 = 0.005. The discount factor (1.005)−60 is about 0.7414, so the denominator is 1 − 0.7414 = 0.2586. Payment = 25000 × 0.005 / 0.2586 = $483.32 a month. Over 60 payments you pay $28,999.20 in total, of which $3,999.20 is interest.

Try this example →

Common mistakes

  • Entering the term in years. The field is in months, so a 5-year loan is 60, not 5.
  • Typing the car price instead of the amount financed. Subtract your down payment and any trade-in value first, and add rolled-in fees only if they are really financed.
  • Entering the rate as a decimal (0.06). It is a percentage, so 6% is 6.
  • Comparing offers by monthly payment alone. A longer term lowers the payment but raises total interest, so compare the total interest figure as well.
  • Using the dealer's advertised rate without checking whether it is the annual rate on the same loan amount and term you are modelling.

Sources

About this calculator

An auto loan is a standard amortizing installment loan: the lender advances the loan amount, and you repay it in equal monthly installments that blend principal and interest, using the amortization formula M = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the loan amount, r is the monthly interest rate, and n is the number of monthly payments. Early payments are weighted more toward interest and later payments more toward principal, even though the payment amount itself stays fixed.

Dealerships, credit unions, and banks all price car loans this way, and the same formula underlies lease-versus-buy comparisons and refinancing decisions. Loan amount, APR and term in months give the monthly car payment, the interest over the loan and what the vehicle really costs once financing is added, so you can compare dealer offers or see what a shorter term or a bigger down payment changes.

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