Car Payment Calculator

A fixed-rate auto loan spreads principal and interest into equal monthly payments. Each payment uses standard amortization: early payments are mostly interest; later ones pay down more principal.

This estimate covers loan amount, APR, and term only. It excludes sales tax, registration, dealer fees, gap insurance, and extended warranties — add those to your out-the-door budget separately.

Example: a $28,000 loan at 5.9% APR over 5 years (60 months) has a monthly payment of about $539. Total interest over the life of the loan is roughly $4,340. Actual APR varies by credit score and lender.

Enter the amount financed, not the sticker price. That figure is the negotiated price plus tax, title, and any dealer fees you choose to roll in, minus your down payment and trade-in equity. Rolling fees into the loan is convenient but you then pay interest on them for the whole term.

A longer term lowers the payment and raises the total cost. The same $28,000 at 5.9% costs about $539 a month over 60 months, but roughly $465 over 72 months and $412 over 84 — and the 84-month version pays about $2,600 more interest than the 60-month one. Compare total interest, not just the monthly figure.

Long terms also invite negative equity. A car typically depreciates faster than an 84-month loan amortises in the early years, so you can owe more than the vehicle is worth well into the term. That gap is what gap insurance covers, and it is the main reason a trade-in before payoff can roll old debt into the next loan.

APR is not the same as the interest rate: it folds in lender fees, which is why it is the figure the US Truth in Lending Act requires for comparison. Dealer-arranged financing may also carry a markup over the rate the lender approved, so a pre-approval from your own bank is a useful benchmark before you negotiate.

Paying extra toward principal shortens the term rather than reducing the scheduled payment. On a simple-interest auto loan, an extra $50 a month against that $28,000 example retires the balance roughly seven months early. Confirm your lender applies overpayments to principal and does not use a precomputed-interest contract.

Gap insurance, extended warranties, and registration are excluded — add them to your out-the-door budget separately.