Car Loan Calculator

Calculate how much you will spend on your next car

Loan Amount
Interest Rate
%
Loan Term
months
=
years
Results
$376.97
Monthly Payment
$22,618.00
Lifetime Payment
$2,618.00
Total Interest Payment
Amortization Graph
Lifetime Payment Breakdown
Principal
$20,000
Interest
$2,618
Car Loan FAQ

Your monthly car loan payments consist of two portions, much like a mortgage amortization payment. Each month, you must pay interest on the principal amount remaining on your loan. The rest of your monthly payment goes towards repaying the actual principal balance. Since your monthly interest charge depends on your remaining principal amount, it decreases throughout the loan term. However, your monthly principal repayment will stay the same.

How to get a car loan?

You can either get a car loan from a lender or from your car dealership. However, you don’t need to pick one before buying a car. Instead, you should first get pre-approved for a car loan from a bank, credit union, or online lender. This is a powerful tool you can use at the dealership to set a price limit and get competitive loan rates. Make sure to explore your options and find the best interest rate. Your interest rates and eligibility will depend on your credit score, but it varies between lenders. Try to get a shorter term on your loan to save on the total interest expense, but make sure you can afford the higher monthly payments. When you find the best loan, you should get pre-approved before going to the dealership.

Once you get to the dealership, it may be difficult to compare different car loans, so use your pre-approved loan as a baseline and only accept the dealership’s loan if it is cheaper. The dealer can walk you through the loan application process and submit the application on your behalf. If you stick with your original loan, then you will have to go directly to your lender to be formally approved for your loan. In either case, there are a number of requirements which generally include:

  • Government issued identification
  • Proof of residency
  • Proof of income
  • Proof of car insurance
  • Age of majority A credit rating check (done by your lender)

Car Loan Rates

  • I: Monthly Interest Expense
  • R: Quoted Annual Interest Rate
  • P: Unpaid Principal Amount

Car loan interest rates can range between 0% to 30% for good credit loans and heavily depend both on your lender and your credit risk. Get interest rates from multiple lenders to make sure you’re getting the best deal with your credit.

Used Car Loan Rates

When getting a used car, your loan interest rates will be anywhere from 5-20% higher. Manufacturers provide incentives for purchasing new vehicles and other lenders will generally match these rates. This can make buying a used car much more expensive, so you should reevaluate the total cost of getting a new or used car.

Refinance Car Loan

Refinancing a car loan is done by getting a new car loan to pay off your current loan and can be done almost immediately. It’s usually used when car buyers with subprime car loans have trouble keeping up with the high interest rates. Other uses include extending the loan term to reduce your monthly payments, removing the loan co-signer, or adding a new payee. By refinancing your car loan, you can negotiate new terms and since you already bought the car, the loan amount is simply the remaining principal amount. However, since you are getting a new loan, you will have to requalify for the loan, which includes a new credit assessment. Therefore, if you want a better loan, you should only reapply if your credit score or your financial situation has improved.

Bad Credit Car Loans

Often called “subprime” auto loans, bad credit car loans are used to help people with credit scores lower than 600. However, you will have to pay much higher interest rates that range between 10% to 50%. There are many car loan options for people with bad credit, so you should still compare different lenders to get the best interest rates.

Bad credit car loans are offered by specific lenders who often partner with car dealerships. This means that your choice of car brands may be limited, but will usually include:

  • Hyundai
  • Toyota
  • Mazda
  • Volkswagen
  • Subaru
  • Honda

The process of getting a bad credit loan is almost identical to a normal car loan. However, you should save money and ensure that you will be able to make payments. People are often unable to keep up with the high interest rates on poor credit loans. If you do become at risk of defaulting on your payments, talk to your lender to negotiate a better payment plan.

How to sell a car with a loan?

Before selling your car, you should figure out how much you still owe because when you sell your car, you will have to repay the loan in full. This includes both your remaining principal amount and any interest that accrues until the repayment date*. By getting a payoff letter from your lender, you can find the exact amount. If possible, you should try repaying the loan before selling your car. This will make the transaction smoother because you will get the certificate of title. However, if you cannot repay the loan, you can use the proceeds from the sale of the car to pay the loan. This means that the buyer will have to accept some risk because they will be driving it without owning the certificate of title. If you do not get enough money from the sale to repay the full amount, you will have to pay the difference yourself.

* The repayment date is not the end of your loan term, but rather the date when you use the sale proceeds to repay the remaining principal amount on your loan.

Selling to a dealer and selling to an individual buyer come with different benefits. It may be easier to find a dealer that will buy your car and they can help with the paperwork. However, if you can find an individual buyer, you will often get a much better price than a dealership because dealerships must make a profit and handle the paperwork. With an individual buyer, you should visit your state agency together to ensure that the transfer of ownership is done correctly.