Auto Loan Calculator – Estimate Monthly Payments

An auto loan calculator is an online tool that helps you to work out how much you will pay per month for your car loan, plus how much interest you’ll pay and the overall cost of buying the vehicle. Whether you’re buying a new vehicle, second-hand vehicle, SUV or truck, this car loan calculator will help you to understand how much you might have to pay.

When purchasing a car there are many considerations to take into account. This calculator allows you to understand how much you will be paying by taking into account your down payment, loan amount, interest rate, repayment period and extra fees. This will help you create a realistic budget ahead of heading to a dealership.

By simply entering some information it will help you to understand how much you will be paying each month as an Equated Monthly Instalment (EMI). You’ll also be able to see how much interest you will pay and what different loan terms you’ll be able to choose from. This will allow you to work out how much you might save by reducing the amount you borrow.

Whether you’re buying a vehicle in India, USA, UK, Canada, Australia or other country, the auto loan calculator can help you make informed decisions. However, your loan details will depend on your lender, credit profile, vehicle details and what financing is available.

How to use the Auto Loan Calculator

It’s easy to use an auto loan calculator. Simply follow the steps below to work out how much you’ll be paying towards your vehicle loan.

1. Vehicle Price – Enter the price of the car or vehicle you want to purchase.

2. Down Payment – Enter the amount you’ll be paying as a deposit. This will help you work out how much you can borrow.

3. Interest Rate – Enter the annual interest rate offered by your lender.

4. Loan Period – Choose your loan period (months/years).

5. Extra Fees – If your calculator allows, enter any extra fees such as tax, registration fee, dealers fees etc.

6. Calculate Loan – Press calculate and your calculator will work out how much you’ll be paying per month as an EMI. You’ll also see how much interest you’ll pay and how much you’ll pay overall.

7. Compare Loan Details – You can then play around with the different loan variables such as the deposit, interest rate and loan period to see how this will affect your monthly payments.

To get the most accurate estimate make sure you use the interest rate and loan terms your lender is offering. If you’re still looking at different vehicles, you can also use this to work out how much you’ll be paying for different prices.

Auto Loan Calculator Formula

Most auto loan calculators use the standard EMI formula.

EMI = [P x r x (1 + r) n ] / [(1 + r) n - 1]

Where:

EMI = Monthly payment of the loan

P = Principle loan amount

r = Monthly interest rate in decimal form

n = Number of instalments

To work out your monthly interest rate divide your annual interest rate by 12 and then by 100.

For example if your interest rate was 7.5%:

r = 7.5 / (12 x 100) = 0.00625

If your vehicle price is $30,000 and you make a $5,000 you’ll have:

P = $30,000-\\$5,000=\\$25,000

The total repayment will be:

Total Repayment = EMI x n

The total interest you’ll pay will be:

Total Interest = Total Repayment - P

This assumes you’re making equal monthly payments with a fixed interest rate with no additional fees.

Example

Let’s say you’re planning to buy a new car and want to know how much you’ll be paying on your auto loan.

Your loan details are:

Loan Detail Loan Amount

Vehicle Price $30,000

Deposit $5,000

Loan Amount $25,000

Interest Rate 7.5% p.a.

Loan Period 5 Years

Monthly Payments 60

Using the standard EMI formula your estimated monthly payment will be around $501.

Your estimated repayment will be:

Calculation Estimated Amount

Monthly Payment $501

Total Repayment $30,060

Total Interest $5,060

Loan Amount $25,000

Please note the above has been rounded and is just an example. This assumes you have a fixed interest rate of 7.5% annually with monthly payments and no additional fees, tax or insurance.

You’ll notice that you’re financing $25,000 over five years could result in approximately $5,060 in interest. You can play around with the loan period or deposit to see if you could save on the total amount you’re borrowing.

What does the result mean?

After using the auto loan calculator you’ll want to take a look at the key figures.

Monthly EMI – This shows you how much you’ll be paying per month. You can compare this with your monthly income and other commitments to ensure you can afford the payments.

Total Interest – This shows you how much you’ll be paying in interest over the loan period. This excludes any fees.

Total Repayment – This is how much you’ll be paying in total to your lender. This includes the principle and interest.

Deposit – This is the amount you’re paying up front. The more you pay as a deposit the less you’ll need to borrow.

Loan Period – This shows you how long you’ll be making payments. The longer the loan period the less you’ll pay each month. However, you’ll pay more in interest overall.

Please note that just because you can afford the monthly payments doesn’t mean you can afford the vehicle. You’ll need to factor in fuel, servicing, insurance, registration and other costs.

What affects the result?

There are several things that can affect the result of your auto loan calculator.

Vehicle Price – The higher the price of the vehicle the more you’ll likely have to borrow (unless you increase your deposit).

Deposit – The more you pay as a deposit the less principle you’ll have to pay. This will usually reduce your monthly payments and total interest.

Interest Rate – The higher the interest rate the more you’ll pay. A lower interest rate can reduce the total amount you pay.

Loan Period – Usually the longer the loan period the less you’ll pay per month. However, you’ll pay more in interest overall.

Credit Score – Different lenders may offer different rates depending on your credit score.

New or Second Hand – You may pay different interest rates depending on if you’re buying a new or second hand vehicle.

Fees – You may pay extra fees such as origination fees, dealers fees, registration and other costs which will increase the total amount you’re borrowing.

Trade In – If you’re trading in an eligible vehicle this can reduce the amount you’re borrowing.

Extra Payments – Making extra payments can reduce your interest and shorten your loan period.

Understanding what affects your result will help you to compare your options.

Advantages and Uses

There are many advantages to using the auto loan calculator.

Budget – Helps you to understand how much you’ll be paying per month.

Compare Options – Allows you to compare different interest rates, deposits and loan periods.

Understand Costs – Helps you understand how much you’ll be paying in total for borrowing.

Choose Loan Period – Helps you to choose the right loan period.

Negotiate – Gives you an idea of how much you’ll be paying depending on the price of the vehicle or deposit.

New or Second Hand – Helps you to work out how much you’ll be paying for a new or second hand vehicle.

Avoid Over Borrowing – Helps you to understand what amounts you can borrow that will fit your situation better.

This can help you to understand how much you’ll be paying before you apply for financing from a dealership, bank or credit union. Please note that this is an estimate and doesn’t guarantee you’ll be approved.

Accuracy, Assumptions and Limitations

The auto loan calculator will give you an estimate depending on what you’ve entered. Most basic calculators will assume you have a fixed interest rate, equal monthly payments and a standard loan.

The amount you actually pay may differ due to fees charged by your lender, tax, insurance, variable interest rate, promotional loan and other terms. Some loans may also have different payment structures.

If you’re borrowing for any tax, registration, extended warranty or dealers add-ons the amount you’re borrowing may be higher than the vehicle price minus your deposit. If your calculator allows you to enter these costs it’s worth entering them in to get a better estimate.

This calculator may not account for negative equity, balloon payments, residual value financing or early payment fees. Always check the official loan offer and repayment schedule from your lender.

When budgeting for a vehicle it’s a good idea to take into account how much you’ll be paying for the loan and also any ongoing costs. Comparing different scenarios will help you make a more informed decision.

FAQ

1. What is an Auto Loan Calculator?

An auto loan calculator is an online tool that helps you to work out the monthly payment for your vehicle loan, total interest and total repayment. This will be based on your loan amount, interest rate and loan period.

2. How do I work out my monthly auto loan payment?

Enter your loan amount, interest rate and loan period. The calculator will use the standard EMI formula to work out your monthly payment.

3. Does the Auto Loan Calculator include a deposit?

If your calculator includes a deposit field it will deduct this from the vehicle price. If not calculate your loan amount and enter this.

4. Should I choose a short loan period?

A short loan period will usually reduce the amount of interest you pay. However, you will pay more per month. It depends on your budget, income and other commitments.

5. Can I use this for second hand cars?

Yes. You can use this for new or second hand vehicles. Enter your vehicle price, deposit, interest rate and loan period. Rates may vary depending on your lender and how old the vehicle is.

6. Can I use this in different countries and currencies?

Yes. The standard loan formula will work with different currencies such as USD, INR, GBP, CAD and AUD. However, fees, tax, interest rates and financing will vary between countries.

7. Is this an accurate figure?

No. This is just an estimate. Your payments may vary depending on fees, tax, terms from your lender, variable interest rate and other loan terms. Always double check with your lender to make sure you’re getting the correct figures.