Car Loan Calculator

Approximate Payments:
Monthly payment: $
Total Loan amount: $
Sale Taxe: $
Upfront payment: $
Total interest: $
Total of X payments: $
Total cost: $

The Auto Loan Calculator is a free tool available online and is mostly intended for car purchases within the US. People outside the US can still use the calculator, but will need to adjust accordingly. 

In the calculation area, if only the monthly payment for any auto loan is given, use the Monthly Payments tab (reverse auto loan) in order to calculate the actual vehicle purchase price and other auto loan information needed. 

How Does it Work?

You’ll start looking for auto loans while purchasing a vehicle. Usually, they work as any generic, secured loan given by a financial institution. It has a typical term period of about 36-60 months. 

Here, each month, repayment of principal and interest must be made by the borrowers to the auto loan lenders. Money borrowed from a lender that isn’t paid back can result in the car being legally repossessed.

Generally, there are two main types of financing options available when it comes to this category, namely, direct lending or dealership financing. The first one comes in the form of a typical loan coming directly from a bank, credit union, or financial institution. 

Once a contract has been entered into with a car dealer to buy a motor vehicle, the loan is used from the direct lender to pay for the newly purchased car.

On the contrary, dealership financing is kind of similar except that the auto loan has a lot of paperwork. It is initiated and completed through the dealership instead. 

Auto loans via these dealers are usually serviced by captive lenders that are often associated with each car maker. The contract is then retained by the dealer, but is often and frequently sold to a bank or any other financial institution called an assignee that ultimately services the loan in totality.

How to Use the Car Loan Calculator?

This car loan calculator will help you calculate the equated monthly instalments (EMIs) which you need to pay to the lender monthly till the loan is fully paid off. The EMI system is based on the total loan amount, it’s tenure, and the interest rate added on the principal.

Interest rates may differ across lenders as individuals’ lenders may offer loans at differential rates. For the interest rate, you’ll need to input the rate at which your lender is providing you the loan. 

Use the slider to put in different car loan amounts and tenures to arrive at the EMI that you are comfortable with. The results will give you three things:

A. The EMI: This is the amount that has to be paid on a monthly basis until the loan is fully paid.

B. The break-up: It shows the quantum of interest in each month’s EMI. The rest is the principal amount being repaid each month.

C. The amortisation schedule: This shows the break-up of the interest paid and principal repaid out of the EMI each month until the tenure ends.

The formula that is used for arriving at the EMI is:

EMI = [P x R x (1+R) ^n] / [(1+R)^ n-1], Here, P= Principal loan amount, R= Rate of interest, n= Number of monthly instalments.