Here are explanations of some popular auto loan terms you may see when using a car loan calculator or shopping around for auto loan rates: The graph below shows average interest rates for new and used cars, according to Experian’s Q2 2022 State of the Automotive Finance Market report. Borrowers with credit scores higher than 660 tend to receive lower interest rates than those who have credit scores below that number. The auto loan rates you’re offered depend largely on your credit score. The longer the loan term or the higher the interest rate, the more you’ll pay. Total interest paid : This is the total amount of interest you’ll pay over the life of the loan.Principal amount : This is the amount of money you’ll borrow to finance your auto purchase.Part of each monthly payment goes toward the actual amount owed, called principal, and the other part goes toward interest. Monthly payment : This is the amount you would pay each month for the duration of your car loan.You can use reputable websites like Kelley Blue Book or CarMax to find your vehicle’s trade-in or resale value.Īfter you input the details above, the auto loan calculator will typically display the following results: Trade-in value and down payment : Enter the total cash value of your current vehicle or the amount of your down payment in these fields.If the calculator you’re using doesn’t include this feature, you can check online lenders and banks for rates. Interest rates : Some auto loan calculators ask for your credit score to help determine what interest rate you may qualify for.Having a shorter loan term means a higher monthly payment but less interest paid overall. In general, choosing a longer term will lower your monthly payment, but you’ll pay more in interest. Loan term : This is the number of months you have to repay your car loan.This will determine the total loan amount. If a calculator also asks for the purchase price of the vehicle, subtract the value of any down payment, trade-in or manufacturer or dealer discounts and rebates. Car price : With some calculators, you’ll only enter the amount you want to borrow.We explain the parts of a car loan calculator in further detail below. You can adjust factors in the calculator, such as how many months you want to pay your car loan, to see how your monthly payment would change. Making a larger down payment may also get you a lower auto loan rate.Īn auto loan calculator considers the car price, loan term and interest rate to tell you what your monthly payment would be. Note that new cars typically have lower rates than used cars because they are less risky for lenders. Age of the vehicle you wish to purchase.Several factors will impact your auto loan rate from a dealership or third-party lender, including: You may or may not find similar terms from the dealership, bank or credit union you finance your car purchase with. Keep in mind that an auto loan payment calculator likely can’t tell you what loan terms you qualify for based on this information. Most auto loan calculators ask for standard information, such as: It can also be used to ensure the dealership or lender you finance your new or used car with isn’t trying to inflate your monthly payment. With a calculator, you can determine how large a loan you can afford to take on and, as a result, how much car you can afford. A car loan calculator is a tool you can use to analyze your car loan options before making a purchase.
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