An auto loan is borrowed money used to buy a vehicle, paid back monthly over 3–7 years at a fixed or variable interest rate. This calculator computes your exact monthly payment, total interest cost, and payoff timeline based on 2026 financing rates (averaging 7.5% for new cars, 10.5% for used) — the same calculation your lender uses to determine your APR.
Auto Loan Calculator
Calculate your exact monthly payment, total interest paid, and payoff date. See how down payment and interest rate impact your total cost.
How Your Monthly Car Payment Is Calculated
Your auto loan payment uses the same amortization formula as mortgages and personal loans. It spreads your principal and interest across equal monthly payments over your loan term, with interest front-loaded in early months.
| Variable | Definition |
|---|---|
| M | Monthly payment (principal + interest) |
| P | Principal — the amount you borrow after down payment |
| r | Monthly interest rate = Annual APR ÷ 12 |
| n | Total number of monthly payments (term in months) |
Example: A $25,000 loan at 7.5% APR for 60 months produces a monthly payment of $495. Total interest = $4,725. This exact calculation appears on your official loan documents from the lender.
⚠️ Expert Pro-Tip
The 20% down payment rule isn't optional—it's the difference between owning and owing. Cars depreciate 15–20% in year one. If you finance 95% of a $30,000 car ($28,500), the car is worth $25,500 after year one while you owe $22,000. You're safe. But if you financed $28,000 and the car depreciates to $25,500, you're now $2,500 upside down with no equity cushion. Put 20% down, keep the loan term under 60 months, and you'll always have escape room if your situation changes.