Car Loan Calculator – Estimate Your Auto Loan Payment
Calculate your monthly car payment with our free auto loan calculator. Include sales tax, down payment, trade-in value, and compare different loan terms to find the best deal.
Enter required values to see results
Disclaimer
This calculator provides estimates for informational purposes only. Results may vary based on individual circumstances. Consult a qualified financial professional or tax advisor for personalized advice. Tax rates and brackets are based on 2026 data and are subject to change.
How Much Car Can You Really Afford?
A good rule of thumb is to keep your car payment under 10% of your monthly take-home pay. If you take home $4,000/month, your car payment should stay at or below $400. Aiming for no more than 20% of take-home for all car costs — loan payment, insurance, fuel, and maintenance — is even safer. A $30,000 car financed at 7% for 60 months results in a $594/month payment. Note that car loan APR and interest rate are not the same — APR includes interest plus lender fees, making it the true cost of borrowing and the only fair comparison between loan offers.
How to Use the Car Loan Calculator
Enter the vehicle price (MSRP or negotiated price for new cars; seller's asking price for used), your down payment or trade-in value, loan term in months (aim for 60 months or less for new, 36 months or less for used), and the APR. The calculator shows your estimated monthly payment, total interest paid over the loan term, and a full amortization schedule showing how each payment splits between principal and interest. Earlier payments go mostly to interest; later payments go mostly to principal.
Frequently Asked Questions
Interest rate is the percentage charged to borrow the principal. APR (Annual Percentage Rate) includes the interest rate plus any lender fees, making it the true annual cost of the loan. When comparing loan offers from different lenders, always compare APR — not just the stated interest rate.
NerdWallet recommends 20% down for a new car and 10% for a used car. A larger down payment reduces the loan principal, lowers monthly payments, reduces total interest, and helps prevent being upside down on the loan — owing more than the car is worth — which happens quickly due to rapid depreciation in the first 1–2 years.
Aim for 60 months or less on new cars and 36 months or less on used cars. Longer terms (72 or 84 months) lower monthly payments but significantly increase total interest. On a $25,000 loan at 7%: 60 months = $2,918 total interest; 72 months = $3,529 — $611 more for the same car.
Experian data shows: Excellent credit (781+) averages ~5% APR on new cars; Good (661–780) averages ~7%; Fair (601–660) averages ~11%; Poor (500–600) averages ~15%+. On a $25,000 60-month loan, the difference between 5% and 15% APR is approximately $130/month and $7,800 in total interest.
Always get pre-approved at your bank or credit union before visiting a dealership. This gives you a benchmark rate to compare against dealer financing. Dealerships sometimes offer manufacturer promotional rates (0–2.9% for qualified buyers) which can beat bank rates — but these require excellent credit and are not universally available.
