How is my monthly car payment calculated?

Your monthly car payment is calculated using the loan amount, interest rate, and loan term. The formula uses compound interest to determine equal monthly payments that cover both principal and interest over the life of the loan.

What is a good interest rate for a car loan?

A good car loan interest rate typically ranges from 4% to 6% for borrowers with good credit (700+). Excellent credit (750+) can qualify for rates as low as 3-4%, while fair credit (650-699) may see rates of 7-9%. Rates vary based on credit score, loan term, and whether the vehicle is new or used.

Should I choose a 60-month or 72-month car loan?

A 60-month (5-year) loan is generally better as it minimizes total interest paid while keeping monthly payments reasonable. A 72-month (6-year) loan offers lower monthly payments but significantly increases total interest costs. Avoid terms longer than 60 months unless absolutely necessary.

How much should I put down on a car loan?

Financial experts recommend putting down at least 20% on a new car and 10% on a used car. A larger down payment reduces your loan amount, lowers monthly payments, and helps avoid being underwater on your loan.

Does my credit score affect my car loan rate?

Yes, your credit score significantly impacts your interest rate. Excellent credit (750+) qualifies for the best rates, while poor credit (below 650) may result in rates 2-3 times higher. Improving your credit score before applying can save thousands over the loan term.

What is the 20/4/10 rule for car buying?

The 20/4/10 rule suggests putting down 20%, financing for no more than 4 years, and keeping total transportation costs (payment, insurance, gas, maintenance) below 10% of gross income. This rule helps ensure you can afford the vehicle.

Car Payment Calculator

Free, accurate car payment calculator with instant results. Calculate payments, interest, and total costs in seconds.

Calculate Your Car Loan

Loan Amount

$5,000.00$30,000.00$100,000.00

Down Payment

$0.00$5,000.00$50,000.00

Interest Rate (APR)

0%6%20%

Loan Term (Months)

months

12 months60 months84 months

Your Car Loan Results

Monthly Payment

$483.32

Total Loan Amount

$25,000

Total Interest

$3,999

Total Cost

$28,999

Loan Summary

Vehicle Price:$35,000.00

Down Payment:$5,000.00

Loan Amount:$25,000.00

Interest Rate:6.0%

Loan Term:60 months (5.0 years)

Total Payments:60 payments

Payment Breakdown Over Time

How to Use This Calculator

Enter Loan Amount

Input the total price of the vehicle or the amount you need to borrow.

Set Interest Rate

Enter the annual interest rate offered by your lender (APR).

Choose Loan Term

Select the length of your loan in months (typically 36, 48, 60, or 72 months).

Add Down Payment

Enter your down payment amount to reduce the financed amount.

View Results

See your monthly payment, total interest, and complete amortization schedule.

Adjust & Compare

Modify values to compare different scenarios and find the best option.

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Frequently Asked Questions

Disclaimer

This calculator is for educational and informational purposes only. The results are estimates based on the information you provide and should not be considered financial, legal, or tax advice. Actual loan terms, interest rates, and payments may vary based on lender requirements, credit history, and market conditions. Always consult with a qualified financial advisor, tax professional, or legal expert before making financial decisions. DoTheCalc is not responsible for any financial decisions made based on these calculations.

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How to Use This Calculator

Enter Loan Amount

Input the total price of the vehicle or the amount you need to borrow.

Set Interest Rate

Enter the annual interest rate offered by your lender (APR).

Choose Loan Term

Select the length of your loan in months (typically 36, 48, 60, or 72 months).

Add Down Payment

Enter your down payment amount to reduce the financed amount.

View Results

See your monthly payment, total interest, and complete amortization schedule.

Adjust & Compare

Modify values to compare different scenarios and find the best option.