Enter your Amount Financed, APR, and loan term to estimate total car loan interest, monthly payment, and total scheduled payments.
Table of contents
How to use our Car Loan Interest Calculator
- Find the Amount Financed, APR, and number of monthly payments on your lender offer, financing worksheet, loan statement, or disclosure.
- Enter Amount Financed, not just the vehicle price. The borrowed amount may include taxes, fees, add-ons, or debt from an older loan.
- Enter APR as a yearly percent, then enter the loan term in whole months. For example, five years is 60 months.
- Select "Calculate" to see total interest paid, estimated monthly payment, and total of scheduled payments.
- Check the 36-, 48-, 60-, and 72-month rows using the same amount and APR. A longer term should lower the payment but usually raises total interest, so compare both numbers before deciding.
Definitions
Amount Financed: The amount borrowed for the vehicle loan. It can differ from the vehicle price because loan fees, taxes, add-ons, down payment, and trade-in value can affect the amount borrowed.
APR: Annual percentage rate. It is the yearly percentage used to calculate borrowing cost; this calculator converts it to a monthly rate.
Loan term: The number of scheduled monthly payments. A 60-month term has 60 payments.
Total interest paid: The estimated amount paid above the Amount Financed over the scheduled loan term.
Total of scheduled payments: The estimated sum of every monthly principal-and-interest payment. It equals Amount Financed plus estimated interest.
Common mistakes and quick fixes
Mistake: Entering the vehicle price instead of Amount Financed.
Fix: Copy the loan amount from lender paperwork. Use the vehicle price only if it is the full amount borrowed.
Mistake: Entering 5 for a five-year loan.
Fix: Enter months, so use 60 for five years.
Mistake: Choosing a loan based only on the monthly payment.
Fix: Compare total interest and total scheduled payments too. A longer term can cost more even when its payment is lower. [1]
Mistake: Using malformed money text such as 25,00.
Fix: Enter 25000, 25,000, or $25,000. Commas must separate groups of three digits.
Mistake: Mixing an APR decimal comma and decimal point, such as 1,2.3.
Fix: Use one decimal point, such as 6.9, or one decimal comma, such as 6,9.
Limitations & Key Assumptions / Boundary Conditions
- This estimate assumes a fixed APR, a fixed Amount Financed, and equal monthly principal-and-interest payments.
- Vehicle price, down payment, trade-in value, taxes, insurance, maintenance, late fees, and other charges are not included unless they are already included in Amount Financed.
- The entered APR is used as the annual rate in a monthly payment formula. A lender may instead use daily simple interest or apply fees differently.
- Actual payment amounts, payoff amounts, and total interest can differ because of lender rounding, payment dates, extra payments, skipped payments, or loan changes.
- The 36-, 48-, 60-, and 72-month rows use the same Amount Financed and APR. They are estimates for comparison, not loan offers.
Methodology
Calculation method
The calculator changes the yearly APR into a monthly decimal rate and applies the level-payment formula for a fixed-rate loan. It uses the unrounded payment for totals, then rounds displayed dollar amounts to cents.
r (monthly rate) = APR (percent per year) / 1200
M (monthly payment) = P (amount financed) x r / (1 - (1 + r)^(-n))
T (total scheduled payments) = M x n
I (total interest paid) = T - P
P is Amount Financed, r is the monthly rate, and n is the number of monthly payments. When APR is 0%, the calculator divides Amount Financed by the number of months, so total interest is $0.
Worked mini-example
For $12,000 financed at 12% APR for 12 months, the monthly payment is about $1,066.19. The total of scheduled payments is about $12,794.23, so total interest is about $794.23.
Term comparison
The comparison table repeats the same calculation for 36, 48, 60, and 72 months using your Amount Financed and APR. Compare the monthly payment with total interest because a lower payment from a longer term can raise the total cost. [1]