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Our calculator shows you the payment you’d get based on a car’s price. It’s important to figure out what a price in the tens of thousands of dollars would actually translate as your monthly payment. You should use an auto loan calculator when you first car shop online so you’ll know your price limit. You should also use one at the dealership to make sure that the dealer isn’t trying to inflate your monthly payment and slip in add-ons.
Before you go to the dealer, get prequalified for an auto loan so you know what car loan APR you deserve and the dealer can’t pad the rate and take the difference as profit. Potential lenders include your local credit union, bank or online lender. You could fill out an online form at LendingTree and get up to five offers at once from auto lenders.
The auto loan calculator takes the car price, loan term and loan APR, and uses that to tell you what your monthly payment would be. Adjust one number — how many months you’d like to pay, for example — and the monthly payment changes. We’ll explain the different parts of the calculator below.
Loan amount. This is how much you want to borrow. It should be the price of the car, minus any down payment, plus taxes and fees. If you have a trade-in, positive equity contributes to your down payment; negative equity increases the amount you have to borrow.
Term. This is how long the loan lasts from the time you sign the paperwork until the final monthly payment. Most lenders use months instead of years for the term because the number of months is equal to the number of payments. We recommend getting a loan less than 84 months long.
Interest rate. This number is a percentage. It’s what the lender charges for loaning you the money. The actual amount you pay the lender is based on this percentage and how much you borrow. Here’s a table showing the APR you may qualify for based on your credit score.
| Credit Score | Average APR |
|---|---|
| 720 or higher | 4.22% |
| 680-719 | 4.92% |
| 660-679 | 5.63% |
| 640-659 | 6.24% |
| 620-639 | 7.43% |
| 580-619 | 9.19% |
| 560-579 | 12.05% |
| Less than 560 | 16.11% |
Estimated auto payment. This is your estimated monthly payment based on what you typed in the fields we described above.
Loan amount. This is how much money you would borrow in total. It should match the loan amount you typed in.
Total payments. This is how many payments you would make over the entire life of the loan. It should be equal to the monthly loan term you typed in.
Is the payment too high? There are three ways you could lower your payment. You could reduce the amount borrowed in the calculator. In real life, this means you would look for a less expensive car or pay more of a down payment. The second option to lower your payment is to increase the loan term. Be careful with this because the longer the term, the more you pay in interest. The third option is to get a better rate by increasing your credit score or getting a cosigner.
Is the payment really low? If you can afford to pay more, look at decreasing your loan term. This could increase your monthly payment and save you money in interest. Or you could consider buying a more expensive vehicle.
Is the payment just right? Congratulations! You know the vehicle price you should aim for.
By calculating the largest cost of car ownership — the payment — before you shop, you know your price limit and won’t become infatuated with a new-car smell and go way over budget. But don’t forget to use the car loan calculator when you’re out shopping to double-check that everything’s in line and you’re getting what you want at a monthly payment you can afford.