Car Loan Calculator

Enter the vehicle price, cash down payment, net trade-in credit, annual percentage rate (APR), and loan term in months to see your exact principal financed, monthly payment, total loan cost, and total interest paid.

About this calculator

Calculate your exact monthly auto loan payment, net principal financed, total loan cost, and cumulative interest paid across any APR and loan term.

Core Mathematical Formula

Principal = max(0, Vehicle Price − Down Payment − Trade-In Value)
Monthly Rate (r) = (APR ÷ 100) ÷ 12
Monthly Payment = Principal × [r × (1 + r)^n] ÷ [(1 + r)^n − 1]
Total Interest = (Monthly Payment × n) − Principal

Verified Calculation Benchmark

Financing a $28,000 car with a $3,000 cash down payment and $0 trade-in leaves a $25,000 loan principal. At 6.50% APR over 60 months, the monthly payment is $489.15, total loan payments equal $29,349.26, and total interest paid is $4,349.26.

How the Car Loan Calculator Isolates Principal and Interest Amortization

Dealers know this trick well. When you sit down inside a Finance & Insurance (F&I) office, the manager tries to steer your attention toward a single monthly payment box while hiding the interest rate and loan length. I see this mistake every week. By auditing your loan structure against official Consumer Financial Protection Bureau (CFPB) Auto Loan Resources, commercial bank APR averages in the Federal Reserve G.19 Release, and direct credit union rates tracked by the National Credit Union Administration (NCUA), you can see every dollar of principal and interest before signing.

When you sit down in a dealership finance and insurance (F&I) office, the finance manager almost always negotiates around a single number: the monthly payment. Focusing exclusively on the monthly payment is the fastest way to overpay by $3,000 to $6,000 in financing charges. Stretching a loan from 60 months to 72 or 84 months makes the monthly bill look $65 smaller while quietly adding thousands of dollars in compounding interest and keeping you underwater on the loan for years.

The Khulasa Car Loan Calculator strips away dealership payment-packing tactics by isolating the pure loan amortization math: how your cash down payment and trade-in reduce the principal borrowed, how your Annual Percentage Rate (APR) compounds monthly, and exactly how many dollars go straight to the lender as interest over the life of the note. (If you also want to roll state sales tax, title, and dealer documentation fees into the financed balance, use our companion Monthly Car Payment Calculator.)

Step-by-Step Auto Loan Amortization Math (Verified Example)

Auto loans in the United States are simple-interest, fixed-payment amortizing installment loans. Let's trace the exact math for a $28,000 vehicle with a $3,000 down payment, $0 trade-in, 6.50% APR, and a 60-month (5-year) term:

Step 1: Calculate Net Loan Principal: Subtract cash down and trade-in credit from the vehicle price:
Principal = $28,000 − $3,000 − $0 = $25,000.00
Step 2: Convert Annual APR to Periodic Monthly Rate (r): Divide the annual rate by 100 and then by 12 months:
r = 6.50 ÷ 100 ÷ 12 = 0.00541667 per month
Step 3: Compute Compounding Factor for n = 60 Months:
(1 + r)^60 = (1.00541667)^60 = 1.382817
Step 4: Compute Exact Monthly Payment:
Payment = $25,000 × [0.00541667 × 1.382817] ÷ [1.382817 − 1] = $489.15 per month
Step 5: Compute Total Paid and Total Interest:
Total Paid = $489.1544 × 60 months = $29,349.26
Total Interest = $29,349.26 − $25,000.00 = $4,349.26

In Month 1 of that loan, $25,000 × 0.00541667 = $135.42 of your $489.15 payment goes to interest, and only $353.73 reduces your loan balance. By Month 55, almost the entire payment goes toward principal.

2026 US Auto Loan APR Benchmarks by Credit Score Tier

Your FICO Auto Score is the single strongest determinant of the APR a bank, credit union, or captive automaker lender will offer. The table below shows realistic 2026 US market average APRs across the five standard Experian credit tiers and what each tier costs on a $30,000 auto loan over 60 months.

Credit Tier (FICO Auto Score)	Avg New Car APR	New Car Payment ($30k / 60 mo)	New Car Total Interest	Avg Used Car APR	Used Car Payment ($30k / 60 mo)	Used Car Total Interest
Super Prime (781–850)	5.25%	$569.58 / mo	$4,174.76	6.80%	$591.21 / mo	$5,472.69
Prime (661–780)	6.75%	$590.50 / mo	$5,430.24	9.15%	$624.89 / mo	$7,493.29
Nonprime (601–660)	9.60%	$631.51 / mo	$7,890.39	13.65%	$692.65 / mo	$11,558.88
Subprime (501–600)	13.10%	$684.19 / mo	$11,051.23	18.75%	$774.11 / mo	$16,446.32
Deep Subprime (300–500)	15.85%	$727.14 / mo	$13,628.60	21.40%	$818.23 / mo	$19,093.92

Loan Term Comparison: How 72- and 84-Month Loans Inflate Interest

See what happens when you finance $30,000 across five different loan terms. In real lending markets, banks also charge a 0.40% to 0.90% higher APR on 72- and 84-month terms because longer loans carry higher default and negative-equity risk:

Loan Term	Typical Prime APR	Monthly Payment	Total Interest Paid	Total Loan Cost	Remaining Balance After 36 Months
36 Months (3 Years)	6.10%	$914.01	$2,904.50	$32,904.50	$0.00 (Paid Off)
48 Months (4 Years)	6.35%	$709.38	$4,050.03	$34,050.03	$8,238.12
60 Months (5 Years)	6.50%	$586.98	$5,219.12	$35,219.12	$13,261.44
72 Months (6 Years)	6.95%	$510.77	$6,775.29	$36,775.29	$16,743.90
84 Months (7 Years)	7.45%	$459.40	$8,589.94	$38,589.94	$19,351.85

Notice the final column: after three years of making every payment on time, the 84-month borrower still owes $19,351.85 on the loan and has paid nearly triple the total interest of a 36-month borrower. Before signing a long-term note, read our deep dive on why 72- and 84-month car loans trap drivers in negative equity.

Frequently Asked Questions

How is a monthly car loan payment calculated?

First, subtract your down payment and trade-in value from the vehicle price to find the loan principal (P). Next, divide the annual interest rate (APR) by 100 and then by 12 to get the monthly interest rate (r). Finally, apply the standard amortization formula over n months:

Payment = P × [r × (1 + r)^n] ÷ [(1 + r)^n − 1]

How much does every $1,000 borrowed add to a monthly car payment?

On a standard 60-month auto loan at 6.50% APR, every $1,000 financed adds $19.57 to your monthly payment (and costs $174.00 in interest over 5 years). On a 48-month loan at 6.50% APR, every $1,000 borrowed adds $23.71 per month.

Why are used car loan interest rates higher than new car rates?

Used car APRs average 2.0% to 4.5% higher than new car APRs for two reasons: automakers subsidize new-car interest rates (0.9%–3.9% promotional APRs) through their captive finance arms to move factory inventory, and older vehicles have less predictable collateral recovery value if a borrower defaults.

What is the difference between this Car Loan Calculator and the Monthly Car Payment Calculator?

This Car Loan Calculator focuses on pure loan amortization (Vehicle Price minus Down Payment and Trade-In across APR and term) and displays your exact Total Interest Paid. Our Monthly Car Payment Calculator adds state sales tax, trade-in tax credits, and dealership fees directly into the financed balance to model an out-the-door dealership contract.

Can I pay off an auto loan early without penalty?

Nearly all prime bank, credit union, and automaker captive loans in the US use simple daily interest without prepayment penalties. Making extra principal payments reduces your balance immediately, cutting both total interest paid and the remaining number of months.

How much down payment should I put on a car loan?

Financial analysts recommend putting at least 20% down on a new car and 10% to 15% down on a used car. A 20% down payment offsets the steep first-year depreciation drop so you never owe more on the loan than the vehicle is worth.