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Enter your vehicle price, down payment, loan term, and interest rate to see your real monthly payment in seconds. Includes sales tax and trade-in value.
Amortization schedule
How each payment splits between interest and principal over the life of the loan.
| # | Date | Payment | Principal | Interest | Balance |
|---|
How car loan payments are calculated
Your monthly car payment depends on three things: the amount you borrow (the principal), the annual interest rate (APR), and how long you take to pay it off (the loan term). Lenders use a standard amortization formula to spread your payment evenly across every month, with each payment covering both interest and a portion of principal.
Early in the loan, most of your payment goes to interest. As the principal shrinks, more of each payment goes toward paying down the balance. By the final months, interest is a tiny sliver of each payment. That's why making a few extra principal payments early in the loan saves significantly more interest than the same payments made later.
The formula itself: M = P × (r(1+r)n) / ((1+r)n − 1), where M is your monthly payment, P is the principal, r is the monthly interest rate (APR ÷ 12), and n is the total number of monthly payments.
How loan length changes your payment
Stretching a car loan from 60 to 84 months drops your monthly payment, but the trade-off can be brutal. Here's how a $30,000 loan at 7.5% APR plays out across common terms:
| Term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 36 months | $933 | $3,584 | $33,584 |
| 48 months | $725 | $4,808 | $34,808 |
| 60 months | $601 | $6,069 | $36,069 |
| 72 months | $518 | $7,361 | $37,361 |
| 84 months | $461 | $8,684 | $38,684 |
A 72-month loan saves about $83 a month versus a 60-month loan, but costs an extra $1,300 in interest. An 84-month loan adds another $1,300 on top of that. You're also more likely to be "underwater" — owing more than the car is worth — for most of the loan, which becomes a real problem if the car gets totaled or you need to sell early.
Frequently asked questions
How much car can I actually afford?
A common rule: keep your total monthly transportation costs (payment, insurance, gas, maintenance) under 15% of your take-home pay. For the loan payment alone, aim for under 10%. If you're stretching to 12% or more, the car is likely too expensive — and that's before you account for the rest of your budget.
Should I make a larger down payment?
Yes, when possible. A larger down payment reduces the principal you finance, which cuts both your monthly payment and total interest. It also lowers your loan-to-value ratio, which often gets you a better interest rate. The standard guidance is at least 20% down on a new car or 10% on used — but more is almost always better.
Is a longer loan term worth it?
Rarely. Longer terms lower the monthly payment but increase total interest and the amount of time you spend owing more than the car is worth. If you can't comfortably afford a 60-month payment on a given car, that's a strong signal to buy a less expensive car rather than stretch to 72 or 84 months.
How does my credit score affect my interest rate?
Significantly. Drivers with credit scores above 720 typically qualify for the lowest advertised rates. Scores between 660 and 720 see moderate increases. Below 660, rates can be 4–8 percentage points higher than the best advertised rate, which on a $30,000 loan can mean an extra $5,000–$10,000 over the life of the loan. Checking your score and shopping multiple lenders before visiting a dealer is the single most valuable thing you can do.
What's APR and how is it different from the interest rate?
APR (Annual Percentage Rate) includes the interest rate plus most loan fees, so it reflects the true yearly cost of the loan. The interest rate alone is just the cost of borrowing the principal. For most car loans, APR and interest rate are nearly identical because fees are minimal. For mortgages, the gap is wider.