Auto Loan Calculator

What This Loan Costs You in Total

The monthly payment is the figure a dealer will quote. The figure that decides whether the loan is a good one sits below it: the total interest, which is what the borrowing costs on top of the car and the only part you never get back.

Every example on this page uses the same loan so the comparisons stay honest: $28,000 borrowed at 6.5% APR. Over 48 months that is $664.02 a month, $3,873 of interest, and $31,873 handed over in total.

The card also splits the first payment into principal and interest: $512.35 reduces the balance and $151.67 is the interest charge. Because interest is charged only on what is still outstanding, that split improves every single month, and the last payment is almost entirely principal.

Work out the interest yourself any time with one subtraction: monthly payment × number of months − amount borrowed. On this loan, $664.02 × 48 = $31,873, less the $28,000 borrowed, gives $3,873.

One habit is worth building before you walk into a dealership. Decide your maximum total first — the most you are willing to pay including interest — and work backwards, rather than starting from a monthly figure someone else suggests. Dealers almost always open with "what payment are you looking for?", and answering that first hands over control of the term and the price at once.

This page assumes you already know roughly what you need to borrow. If you have not settled that yet, check what monthly payment fits your budget with our car payment calculator first, then come back to compare the financing.

Total Interest Cost by Loan Term

Term is the lever lenders are most willing to move, because extending it lowers the monthly figure without reducing their return — it increases it. Here is our $28,000 loan at 6.5% APR across every common term:

The headline comparison on this page is 48 against 72 months. Stretching from four years to six cuts the payment by $193.34 a month — real breathing room if cash is tight. It also lifts the interest from $3,873 to $5,889, an extra $2,016, which is about 52% more interest for exactly the same car at exactly the same rate.

Read the two extremes to see the full span. The 36-month loan costs $2,901 in interest; the 84-month loan costs $6,927. The car is identical and the rate never changed — only the number of months you spent borrowing.

A fair counter-argument deserves a hearing. A smaller required payment is a genuine safety net if your income is irregular, and missing payments does far more damage than paying extra interest. Taking the longer term and voluntarily overpaying gives you both the lower obligation and the earlier payoff. The danger is only in taking the longer term and spending the difference.

How Amortization Works on an Auto Loan

An auto loan is an installment loan, so it uses the same amortization formula as a mortgage or a personal loan. The formula finds the single level payment that clears the balance exactly at the end of the term:

What the formula produces is a payment that never changes — but the job each payment does changes every month. Here is how our $28,000 loan at 6.5% over 48 months actually unwinds:

The payment is $664.02 every time, but the first one spends $151.67 on interest and the last spends $3.58. That is amortization: interest is charged on the balance still outstanding, so as the balance falls the interest charge falls with it and more of each fixed payment attacks the principal.

This is also why the early months matter most. Nearly a quarter of your first payment is interest; by the halfway point it is well under a seventh. For a payment-by-payment schedule on any loan, our amortization calculator prints the full table.

Why It Must Be the APR You Compare

The APR expresses the yearly cost of borrowing including lender fees, which is precisely why it is the number to compare. A loan advertised at a lower nominal rate but carrying an origination fee can cost more than one quoted slightly higher with no fee. If a lender quotes you a rate, ask specifically for the APR and get it in writing. Our guide to understanding interest rates covers how APR differs from APY and from a simple headline rate.

Simple Interest and Why It Matters Here

Most US auto loans are simple-interest loans: interest accrues on the outstanding balance, so it falls as you repay. This is what makes overpayment worthwhile and why paying a few days early can genuinely reduce the charge. A minority of agreements use precomputed interest, where the total is fixed at signing and early repayment saves little or nothing. Check which you are being offered before you assume overpaying helps.

Fees Rolled Into the Loan

Paying $2,000 of tax and fees up front costs exactly $2,000. Roll the same $2,000 into our 48-month loan at 6.5% and it costs about $2,277 by the end, because you pay interest on it for four years. The difference is easy to miss precisely because it is spread thin.

How APR Changes the Total Cost

The rate matters far more to the total than it does to the monthly figure, and that asymmetry is exactly why expensive loans are hard to spot. Here is our $28,000 loan over 48 months across a span of rates:

Look at the 4.50% row against the 6.50% row. Two percentage points is only about $25 a month — small enough to shrug at across a desk — but $1,214 in total interest. Across the full span from 3% to 12%, the monthly gap is $118 while the total gap is $5,645.

That is the whole reason to compare the APR rather than the payment. A monthly figure flattens a rate difference into something that looks trivial; the total interest column does not.

These are the practical levers for moving the rate you are offered:

For what rates are actually doing in the market, use primary sources rather than any figure quoted on a calculator page. The Federal Reserve's G.19 consumer credit release publishes average auto-loan rates, and the Consumer Financial Protection Bureau's auto loan guidance explains how to shop for financing.

Paying the Loan Off Early

Because most US auto loans charge simple interest on the outstanding balance, every dollar you pay above the scheduled amount reduces that balance immediately — and reduces every interest charge that follows. This is the one lever still available to you after signing.

Here is what an overpayment does to our $28,000 loan at 6.5% over 48 months:

An extra $100 a month — about $3.30 a day — clears the loan seven months early and saves roughly $590. Note that the saving grows faster than the overpayment: tripling the extra from $100 to $300 more than doubles the interest saved, because the balance falls faster from the very first month.

Two things to confirm with your lender before relying on this:

You can model any of this yourself with the Extra Monthly Payment field in the calculator above — it recalculates the payoff date and the exact interest saved.

New vs Used Auto Loans

Lenders treat new and used vehicles differently, and the difference shows up in the APR you are offered rather than in the formula itself. Used vehicles are generally considered higher risk — their condition varies, their resale value is harder to predict, and they are more likely to need repairs during the loan — so used-car APRs are typically higher than new-car APRs for the same borrower.

That gap can be offset, sometimes completely, by two things. First, manufacturers subsidize financing on new vehicles to move inventory, which is where unusually low promotional APRs come from. Those offers are genuine but usually restricted to strong credit profiles, specific models and shorter terms — and taking one often means forfeiting a cash rebate, so compare the rebate against the interest saved before choosing.

Second, and more importantly, a used vehicle costs less to begin with. A higher APR on a smaller balance can still produce a lower total cost than a low APR on a much larger one.

Two further points worth knowing. Depreciation is steepest in a vehicle's first two or three years, so a used buyer lets the first owner absorb most of it. And some lenders cap the term on older or higher-mileage vehicles, which can push the monthly payment up even when the amount financed is modest — worth checking before you settle on a budget.

Certified pre-owned vehicles sit between the two categories. They are used, so the purchase price has already absorbed the steepest depreciation, but because they come with a manufacturer-backed inspection and warranty, some lenders price them closer to new-vehicle terms. Whether that is worth the premium over an ordinary used vehicle depends entirely on the numbers in front of you — a comparison the calculator above can settle in under a minute.

One cost that never appears in a loan calculator but belongs in the comparison: insurance. Premiums vary by vehicle, and a newer or more powerful model can cost noticeably more to insure than an older one. If two options look close on total loan cost, the insurance quote can be the deciding factor, so it is worth getting one before you commit rather than after.

Dealer Financing vs Bank or Credit Union

Three sources will lend you money for a vehicle, and they are not interchangeable. The right answer varies by buyer, by vehicle and by week — which is the argument for collecting quotes rather than assuming.

The dealer's finance office is a profit center, not a neutral broker. That is not an accusation — it is simply how the business works, and it is why the rate offered there may be marked up from the rate the underlying lender approved you for.

Why Pre-Approval Changes the Conversation

A pre-approval is a written offer from a lender stating how much they will lend and at what APR, obtained before you choose a vehicle. It takes a little time and changes the negotiation entirely.

It does three things at once. It tells you your real budget rather than an aspirational one. It sets a benchmark the dealer has to beat, turning their finance office into one competing option rather than the only one. And it lets you negotiate the price alone, because the financing is already settled.

That last point is the one that saves money. Without pre-approval the conversation runs on monthly payments, where price, term and rate can all move at once and only the monthly figure is visible. Consider two offers on the same $28,000:

The dealer offer is about $166 a month cheaper and costs roughly $3,996 more. Presented as monthly payments it is the obvious winner; presented as total interest it is clearly not. This is the single most useful thing a pre-approval protects you from.

If you have not yet settled on a budget, check what monthly payment fits your budget with our car payment calculator — it works from what you can afford each month back to a sensible vehicle price.

How to Use This Auto Loan Calculator

Six steps, and the results update as you type:

1. Enter the vehicle price you have agreed, or the out-the-door price if you want tax and fees included in the amount financed.
2. Set your down payment as a dollar amount, or pick a percentage from the dropdown and the dollar figure fills in for you.
3. Add any trade-in value. Enter only your equity — the vehicle's value minus anything you still owe on it.
4. Choose the loan term, from 36 to 84 months. Try more than one and watch the total interest change.
5. Enter the APR you have been quoted. If you do not have a quote yet, try two or three plausible rates to see how sensitive the answer is.
6. Read the results. The card shows your monthly payment and the principal-and-interest split; open View Payment Breakdown for the amount financed, total interest, total paid and payoff time.

The page loads with the example used throughout: $28,000 at 6.5% over 48 months, with no deposit entered so the amount financed matches the loan exactly. Change the term to 72 months and you can watch the 48-vs-72 comparison from the table above recalculate in front of you.

Nothing you type is stored or sent anywhere, so you can run as many scenarios as you like — comparing two terms, two APRs or two lenders' written quotes.

How We Calculated These Loan Figures

Payments are calculated with the standard fixed-rate amortization formula shown above, applied monthly with no rounding until the figure is displayed. The tool assumes a fixed APR for the whole term and equal monthly payments. The interest totals in the term and APR tables are the sum of every monthly interest charge across the full schedule, not an approximation; the overpayment table is produced by re-running the same schedule with the extra amount added to each payment.

Prices, APRs, terms, down payments and trade-in values are estimates you supply. We do not quote rates, check your credit, or contact dealers or lenders on your behalf. Every worked example on this page uses the same $28,000 loan at 6.5% APR, compared over 48 and 72 months. That rate is an illustrative figure chosen to make the arithmetic easy to follow — not an average, an offer or a prediction. For real market figures, see the Federal Reserve and CFPB links above.

Results exclude tax, fees and insurance. Sales tax, registration, title and documentation fees, dealer add-ons, gap cover, extended warranties, insurance, fuel and maintenance are all outside the scope of this calculator, and they vary widely by state and vehicle. Leases, balloon-payment agreements and variable-rate financing are not modeled either.

Interest totals in the tables are rounded to whole dollars while monthly payments are shown to the cent, so multiplying a rounded total by a term will occasionally land a dollar away from the figure printed beside it. Every number on this page was recomputed from the formula before publication. If you find one that looks wrong, please tell us — we check every report.

Other Borrowing Calculators

If you are costing out a different kind of loan, these cover it: