How to Use This Car Loan Calculator
Calculate your monthly car payment and total loan cost in seconds:
- Vehicle price: Enter the selling price of the car you're interested in.
- Down payment: Input the amount you'll pay upfront (typically 10-20%).
- Trade-in value: If trading in an old vehicle, enter its value.
- Sales tax: Enter your state and local sales tax percentage.
- Interest rate (APR): Enter the annual percentage rate. Rates vary significantly by credit score and lender.
- Loan term: Choose from 24, 36, 48, 60, 72, or 84 months. Longer terms mean lower payments but more total interest.
The calculator instantly shows your monthly payment, total interest paid, and total cost of vehicle ownership. You'll also see a breakdown of how much you're paying in principal, interest, and taxes.
Understanding Auto Loan Interest & Terms
Car loans use amortization, similar to mortgages. Each monthly payment covers interest first, then reduces the principal. The longer your loan term, the more total interest you'll pay, even if your monthly payment is lower.
For example, a $25,000 car loan at 6% interest costs $1,550 in interest over 60 months ($416/month payment), but $2,800 in interest over 84 months ($335/month payment). The lower monthly payment saves you $81/month but costs you an extra $1,250 in total interest.
Most lenders offer 36-month to 84-month terms. While longer terms are tempting for lower monthly payments, they also mean you'll be "upside down" (owing more than the car is worth) for much of the loan, which can be problematic if you need to sell the vehicle.
What Impacts Your Car Loan Rate? (April 2026)
Several factors determine your auto loan APR:
- Credit score (most important): Excellent credit (750+) = 4.5%-6.5%; Good (700-749) = 6.5%-8.5%; Fair (650-699) = 8.5%-12%; Poor (below 650) = 12%+
- Loan term: Longer terms often have slightly higher rates than shorter ones.
- Vehicle type: New cars typically have lower rates than used cars. Luxury vehicles may have higher rates.
- Down payment: Larger down payments (20%+) can qualify for better rates.
- Current market rates: Federal Reserve policy and economic conditions affect overall lending rates.
- Lender type: Banks often offer lower rates than dealerships, which typically mark up rates 1-2%.
Pro tip: Get pre-approved at a bank or credit union before visiting the dealership. Knowing your pre-approved rate gives you leverage to negotiate and prevents dealers from marking up the rate.