Car Loan Calculator

Car loan calculator with amortization schedule and extra payments to calculate the monthly payment and generates a car loan amortization schedule excel. Whether you are buying a used car or financing a new car, you will find this auto loan amortization calculator comes in handy. This auto loan calculator has everything that you may need to calculate your payment with options for a down payment, trade-in, sales tax, fees, extra payments, bi-weekly payments, and a detailed auto amortization schedule for each payment.

Auto Loan Amortization Calculator

The auto loan calculator is able to calculate any type of auto loan and generate an auto loan amortization schedule with principal, interest, and balance for each payment.

Car Loan Amortization Schedule With Extra Payments

The car loan amortization schedule with extra payments gives borrowers the options to see how much they can save by making extra payments toward the principal of their car loan, and how much faster they can pay off the auto loan compared to the default payment schedule.

How do car loans work?

A car loan is a loan that is used to finance the purchase of a car. When a borrower takes out a loan, he gets a lump sum payment from the lender and he needs to pay it back over time with interest. Most car loans are secured using the car as collateral meaning if a borrower defaults on the loan, the lender would take his car. There are three variables that every borrower should be aware of before applying for an auto loan, the loan amount, interest rate, and the term. Borrowers with good credit scores will get the most competitive rates from lenders. Loan amount - the size of the car loan Interest rate - the interest payment is based on the interest rate you get getting Term - the number of years that it takes the borrower to repay the loan These 3 variables determine the monthly payment and the total interest payment over the course of the loan. A lower monthly payment doesn't mean a borrower would save money if their term is longer. For example, the following chart shows two loans of $20,000, one with an interest rate of 4.5% and a 5-year term (Loan 1), the other with an interest rate of 5.15% and a 7-year term (Loan 2). Although the monthly payment is lower for Loan 2 ($284.09 per month), the overall costs are much higher with a total interest of $3,863.56 which is $1,491.94 more than Loan 1.

How to calculate car payments?

To calculate monthly car payments, we need to use the formula below. Monthly Payment = (P x i) / (1 - 1 / (1 + i)^ n), where P = car loan amount i = monthly interest rate in decimal n = number of months to pay off the loan

Car Payment Example

Let's calculate the monthly payment for a car loan of $15,000 with a 5% interest rate and a 5-year term. Monthly Payment = (15000*5/12/100)/ (1 - 1/(1+5/12/100)^60) Monthly Payment = (15000*0.004167)/ (1 - 1/(1+0.004167)^60) Monthly Payment = 62.505/(1 - 1/(1.004167)^60) Monthly Payment = 62.505 / ( 1 - 1/ 1.283) Monthly Payment = 62.505 / (1 - 0.7794) Monthly Payment = 62.505 / 0.2206 Monthly Payment = $283.07 Hence, $283.07 is the amount that borrowers pay each month until the car loan is paid off in 5 years.

How to calculate car loan interest?

The car loan interest rate is calculated based on the interest rate and the remaining balance. The formula for calculating interest payment is given below. Monthly interest = (12/interest rate​) x loan balance Monthly payments are divided into two portions, one for principal and the other for interest payments. The monthly payments stay the same over the course of the loan, but the interest and principal are recalculated each month. If we look at the car amortization schedule for our previous example, the auto loan of $15,000 with a 5% interest rate and a 5-year term, we can see the interest payment declines every month because the loan balance decreases as more principal is paid. Since monthly payment is made up of principal and interest, when interest payment decreases, principal increases.

What is APR on a car?

A car loan's annual percentage rate or APR is the borrowing costs expressed in percentage. The interest rate determines how much the borrower pays in interest payments. There may be other costs involved in getting a loan, such as application fees and closing costs. The APR includes all the costs plus interest costs. Therefore, the APR is usually higher than the interest rate.

How to get an auto loan?

1. Check Credit Report

Credit score and income determine how much you can borrow and at what interest rate. The higher your credit score, the better. Therefore, before applying for an auto loan, you should check your credit report to see if there are any errors or unusual activities that lower your credit score. If you see any error, you should contact the 3 credit bureaus, Equifax, Experian, and TransUnion, and try to resolve the issues before applying for an auto loan.

2. Compare Rates & Costs From Multiple Lenders

You can get an auto loan from any bank, credit union, online auto lender, or dealership financing. You want to get and compare auto quotes from multiple lenders and see which one offers you the best interest rate and the least fees. Dealership financing is the most convenient, but it may not offer the best APR as dealerships often markup their rates. Banks usually offer competitive rates for auto loans. You might want to check with your own bank before you reach out to other lenders. Your bank might even give you a lower rate when you set up auto payment with your checking account. You can also get auto quotes from online lenders and ask around the banks to see if they can beat this rate. Lenders may be willing to lower their interest rates to get your business if you have good credit scores.

3. Get Preapproved For a Car Loan

After you've done your research and decided to get your car loan from a bank or credit union, you should get pre-approved for a car loan from the bank. Getting preapproved for a car loan has many advantages. It will help you find the bank that will give you the best interest rate as the banks will need to pull your credit score and review your financial information. Depending on your employment history, income, and credit score, they will let you know the size of your loan and the interest rate that you will be getting. Preapproved for a car loan will also have more bargaining power at the dealership, and protects you from markup rates from dealerships. The only downside to a preapproved loan is that lenders will need a hard pull for your credit score meaning it will lower your credit score temporarily. Usually, your credit score will rise again in 1-3 months.

4. Find Your Car

After you get preapproved for a car loan, you know exactly how much money you can borrow. You can now set your budget and look for cars that are within your budget. Shop around the different dealerships and see what kind of car you like. Once you decide the exact car you want to buy, call multiple dealerships that sell this brand and model, ask them how much they are selling, and ask for their best price. Make sure you ask for their best price on the car, not the lowest monthly payments. Many car salespeople will try to convince you to buy their car because they give you the lowest monthly payments. As we learned earlier, the lower monthly payment doesn't translate into the lowest costs of buying a car.

5. Applying For The Car Loan

Now, it is time to finalize your car loan or actually apply for the car loan. Since you are already pre approved, the process is much faster. The banks have already checked your financial background and credit score. They have everything that they need to know other than the vehicle you are buying. Follow the lender's instructions on completing the auto loan and the purchase of your vehicle. Read the terms of your car loan and make sure that there are no hidden fees or prepayment penalties in case you want to pay off your loan earlier.