Auto Loan Calculator
Estimate your car payment, total interest, payoff schedule, and how your vehicle depreciates over the loan.
Estimates only, not financial, tax, or legal advice. See our Terms and Privacy Policy.
A car loan is a secured installment loan where you borrow the price of the vehicle minus your down payment. The repayment happens in fixed monthly payments while the car serves as collateral. One potential caveat is that the car can lose value faster than the loan balance decreases in the early months. This reality makes it possible that a buyer spends the first year or two 'upside down' in the loan.
Before you commit, check how this payment affects your debt-to-income ratio.
This calculator computes your monthly payment and total interest, builds a full amortization schedule, and charts the car's depreciating value against your loan balance so you can see exactly when you cross into positive or negative equity.
How does this calculator work?
Enter the vehicle's purchase price and the amount you're financing after any down payment or trade-in. The difference between the two is your upfront equity.
Set the loan term and interest rate (APR). The calculator computes your monthly payment using the standard amortization formula, where each payment covers that month's interest first and applies the rest to principal.
Add an optional extra monthly payment to see how much faster you'd pay the loan off and how much interest you'd save. Extra payments go entirely toward principal.
Set an annual depreciation rate to track the vehicle's market value over time. Comparing the loan balance to the vehicle value shows their value relative to one another.
Worked example
Say you buy a $32,000 car, put $4,000 down, and finance $28,000 at 7% APR over 5 years.
- Purchase price
- $32,000
- Down payment
- $4,000
- Amount financed
- $28,000
- Term / APR
- 5 yrs / 7%
- Monthly payment
- $554
- Total interest
- $5,260
How the numbers work
The $554 payment is what the amortization formula returns for a $28,000 balance at a 7% APR spread over 60 months. This equates to about 0.583% per month. It's the one fixed payment amount that draws the balance to exactly zero on the final payment.
In the first month, interest is the balance times the monthly rate: $28,000 × 0.583% = $163.33. That leaves about $391 of the $554 to reduce principal. The next month interest is charged on a slightly smaller balance, so a little less goes to interest and a little more to principal. This continues even though the payment never changes.
Add up all 60 payments and you've paid roughly $33,270, which is the $28,000 borrowed plus about $5,260 in interest.
Over five years you'd pay about $5,260 in interest. Stretching to a 7-year term would drop the payment to roughly $423 but push total interest past $7,500, and potentially keep you underwater longer, since the car keeps depreciating while the balance falls slowly.
Adding $75/month here retires the loan about 9 months early and saves close to $900 in interest.
Why longer terms cost more than the payment suggests
It's tempting to judge a car loan by its monthly payment, but the term quietly drives the total cost. A longer term spreads the same principal over more months, so each payment is smaller. However, the balance stays high longer, accruing more interest along the way. Seven- and eight-year loans have become common precisely because they make expensive cars feel affordable, while substantially raising what you pay overall.
Longer terms also deepen the negative-equity problem because the car depreciates fastest in its first years while the balance barely moves on a longer loan. You can end up owing thousands more than the car is worth well into the term. This becomes a real risk if the car is totaled or you need to sell.
Auto Loan Calculator glossary
- Purchase Price
- The total sticker price of the vehicle before financing.
- Loan Amount
- The principal you finance after subtracting any down payment or trade-in value.
- Loan Term
- The length of the loan, in years, over which the balance is amortized.
- Interest Rate (APR)
- The annual percentage rate charged on the outstanding balance.
- Monthly Payment
- The fixed amount due each month, covering interest plus principal.
- Extra Monthly Payment
- Additional money applied directly to principal each month to shorten the loan.
- Annual Depreciation Rate
- The percentage of value the vehicle loses each year. New cars often lose 15–20% per year early on.
- Down Payment
- Cash paid upfront that reduces the amount financed and starts you with equity in the car.
- Total Interest
- The sum of all interest paid over the life of the loan, on top of the amount borrowed.
- Negative Equity (Upside Down)
- Owing more on the loan than the car is currently worth — common early on because cars depreciate faster than the balance falls.
Auto Loan Calculator FAQs
How is my auto loan monthly payment calculated?+
The payment is found with the amortization formula using your loan amount, APR, and term. Each month, interest is charged on the remaining balance and the rest of your payment reduces the principal, so early payments are interest-heavy and later payments are principal-heavy.
Does making extra payments on a car loan save money?+
Yes. Because interest accrues on the remaining balance, paying extra principal reduces future interest and shortens the loan. This calculator shows exactly how many months and how much interest you'd save.
What does it mean to be 'upside down' on a car loan?+
You're upside down (or have negative equity) when you owe more on the loan than the vehicle is worth. Because cars depreciate quickly, this is common in the first couple of years. The Automobile Value chart shows when your equity turns positive.
What is a typical car depreciation rate?+
Most vehicles lose roughly 15–20% of their value per year in the early years, with luxury and electric vehicles sometimes depreciating faster. You can adjust the rate to match your specific make and model.