Calculate your monthly car payment, total interest, and view a complete amortization schedule. Enter any vehicle price and loan terms to see exactly what you will pay.
Updated: February 2026 • Free Tool
Auto loan payments are calculated using a standard amortization formula that determines fixed monthly payments over the life of the loan. Each payment covers a portion of the principal (the amount you borrowed) and interest (the cost of borrowing). Early in the loan, most of your payment goes toward interest. As the balance decreases, more of each payment goes toward principal.
Monthly Payment:
M = P × [r(1+r)^n] / [(1+r)^n - 1]
M = Monthly payment
P = Principal (loan amount after down payment & trade-in)
r = Monthly interest rate (annual rate / 12)
n = Total number of payments (loan term in months)
Example:
$30,000 vehicle, $3,000 down, 60 months at 6.5% APR:
Loan amount = $27,000 • Monthly rate = 0.5417% • Monthly payment = $528.34
Total interest = $4,700 • Total cost = $34,700
A widely recommended guideline is the 20/4/10 rule: put at least 20% down, finance for no more than 4 years, and keep total vehicle costs (payment + insurance + fuel) under 10% of your gross monthly income. This rule helps you avoid overspending and being “upside down” on your loan.
Putting 20% down on a $30,000 car ($6,000) reduces your loan to $24,000. This builds instant equity, lowers monthly payments, and helps you avoid negative equity from the start. If 20% is not possible, aim for at least 10%.
Keeping your loan to 48 months or less ensures you pay it off before major depreciation hits. Longer terms (72-84 months) may seem appealing with lower payments, but you will pay thousands more in interest and may owe more than the car is worth for years.
Keep your total car costs (loan payment, insurance, gas, maintenance) under 10% of gross monthly income. Earning $5,000/month? Aim for $500 or less in total car expenses. This leaves room for savings, emergencies, and other financial goals.
Your credit score is the primary factor in the interest rate you will receive. Even a small difference in rate can save or cost you thousands over the life of a loan. Here are typical auto loan rates by credit tier for a 60-month new car loan:
On $27,000: ~$504-515/mo • $3,240-3,900 interest
On $27,000: ~$515-554/mo • $3,900-6,200 interest
On $27,000: ~$554-601/mo • $6,200-9,060 interest
On $27,000: ~$601-688/mo • $9,060-14,280 interest
The difference between excellent and poor credit on a $27,000 loan can be over $10,000 in extra interest. If your score is below 700, consider improving it before taking out a loan, or look into credit union rates which are often 1-2% lower than banks.
The loan term you choose dramatically impacts both your monthly payment and the total amount you pay. Longer terms lower monthly payments but significantly increase total interest. Here is a comparison for a $27,000 loan at 6.5% APR:
$827/mo
Total interest: $2,766
Total paid: $29,766
Best overall value
$641/mo
Total interest: $3,760
Total paid: $30,760
Good balance
$528/mo
Total interest: $4,700
Total paid: $31,700
Most popular choice
$460/mo
Total interest: $6,141
Total paid: $33,141
Higher interest cost
$409/mo
Total interest: $7,345
Total paid: $34,345
Highest total cost
Going from 36 to 84 months saves $418/month but costs $4,579 more in total interest. The shortest term you can comfortably afford is usually the best financial choice.
Review your credit report for errors before applying. Dispute inaccuracies that could lower your score. Even correcting one error could bump you into a lower rate tier, saving $1,000+ over the loan. Free reports are available at AnnualCreditReport.com.
Apply to at least 3 lenders: your bank, a credit union, and an online lender. Multiple auto loan inquiries within a 14-day window count as a single credit pull. Bring the best offer to the dealer and let them try to beat it.
Always negotiate the purchase price before discussing financing. Dealers may offer a lower price to make up for it with a higher interest rate, or vice versa. Separating these negotiations ensures you get the best deal on both.
Lenders often offer lower interest rates for shorter loan terms. A 48-month loan may be 0.5-1% cheaper than a 72-month loan. Combined with less total interest from fewer payments, the savings can be significant.
Credit unions are member-owned and often offer auto loan rates 0.5-2% lower than traditional banks. Many credit unions also offer rate discounts for autopay enrollment. Joining a credit union before you need a loan is a smart financial move.
Dealers and manufacturers often offer promotional rates at the end of the month, quarter, or year when they are trying to hit sales targets. Holiday sales events can include 0% APR promotions on select models — significantly beating any bank rate.
Once you have your auto loan, Carvetka helps you track every dollar you spend on your vehicle. Monitor loan payments alongside fuel, maintenance, and repair costs to see the true cost of car ownership. Make smarter financial decisions with complete expense visibility.
Track every expense — fuel, oil changes, tires, repairs, insurance, and loan payments — in one place. See monthly and annual cost breakdowns to understand where your money goes.
Visualize your cost per mile, monthly spending trends, and compare actual costs vs. calculator estimates. See if your vehicle is costing more or less than expected.
Stay on top of oil changes, tire rotations, and scheduled maintenance. Proper maintenance protects your investment and can save thousands in avoided repairs.
Snap a photo of any service receipt and our AI extracts the details automatically. No manual data entry needed — just scan and track.
