Car Loan Amortization Schedule and Payment Calculator

A car loan amortization schedule shows each monthly payment split between interest and principal, along with the balance left after each payment. Enter the loan amount, annual APR, and term below to estimate the monthly payment and total interest; the schedule itself can be built month by month using the same figures.

Formula

The calculator estimates a level monthly payment for a fixed-rate loan. It uses the standard amortizing-loan formula:

Payment = P × r ÷ [1 − (1 + r)⁻ⁿ]

• P is the amount borrowed, in dollars.
• r is the monthly interest rate as a decimal: annual APR ÷ 1,200.
• n is the number of monthly payments: years × 12.

Total interest is estimated as monthly payment × n − P. The calculator expression displays the payment rounded to cents; the interest output uses that displayed, rounded payment. These formulas assume regular payments and a constant rate.

Worked Example

Using the calculator’s default inputs—$20,000 borrowed, 8% APR, and 5 years:

1. Convert APR to a monthly rate: 8 ÷ 1,200 = 0.0066667, or about 0.66667% per month.
2. Find the number of payments: 5 × 12 = 60.
3. Substitute the values: $20,000 × 0.0066667 ÷ [1 − (1.0066667)⁻⁶⁰].
4. Round the monthly payment to cents: $405.53.
5. Multiply the rounded payment by 60: $405.53 × 60 = $24,331.80 in total payments.
6. Subtract the original amount borrowed: $24,331.80 − $20,000 = $4,331.80 total interest.

Assumptions

• The interest rate remains fixed for the full term.
• Payments are equal, made monthly, and are assumed to arrive at the end of each monthly period.
• Interest accrues monthly using APR divided by 12.
• The estimate excludes lender fees, taxes, insurance, add-on products, and any other charges not represented by the loan amount or APR.

How to Read a Car Loan Amortization Schedule

Each schedule row represents a payment period. The interest portion is calculated on the balance at the start of that period; the rest of the payment reduces principal. As the balance falls, the interest charged in later periods usually falls too, so more of each fixed payment goes toward principal. This changing split is the defining feature of amortization.

For a monthly schedule, calculate each row like this:

• Starting balance: the amount still owed before the payment.
• Interest: starting balance × monthly rate.
• Principal paid: scheduled payment − interest.
• Ending balance: starting balance − principal paid.

For example, at the beginning of the default example, monthly interest is $20,000 × 0.0066667, or about $133.33. With a $405.53 payment, about $272.20 goes to principal, leaving an estimated balance of $19,727.80. The final row may differ slightly because payments and interest are rounded, and lenders can use their own payment and accrual conventions.

What Changes the Payment and Total Interest

The payment depends on the amount financed, APR, and term. With the other inputs held constant, borrowing more increases the payment; a higher APR increases both the payment and total interest. A longer term generally lowers the scheduled monthly payment but means more payments are made and can raise total interest. The exact impact depends on the entered figures.

For a car purchase, the loan amount is not necessarily the vehicle’s advertised price. It can reflect a down payment, trade-in value, taxes or fees financed into the contract, and any balance rolled in from another loan. Use the amount actually financed from the lender’s paperwork when available, rather than assuming the vehicle price and principal are identical. Enter the lender’s APR and term as shown in its disclosure; do not substitute an advertised rate or an estimated fee.

Extra Payments, Rounding, and Limits

The calculator estimates the regular payment and total interest; it does not produce a dated, row-by-row schedule or model extra payments. To create an illustrative schedule, apply the four row calculations above repeatedly, carrying each ending balance into the next row. A payment higher than the amount due can reduce principal faster, but the actual result depends on how the lender applies extra money, payment dates, and any contract terms. Confirm those details with the lender rather than assuming extra funds automatically shorten the term.

Small differences between this estimate and a lender’s figures can come from rounding, the first payment date, daily interest accrual, payment timing, financed charges, or a final payment adjusted to clear the remaining balance. Because this formula rounds the regular payment to cents before estimating total interest, the calculated total may not exactly match a lender’s full-precision accounting. Use the figures as an estimate, not a payoff quote.

A common misconception is that every monthly payment reduces principal by the same amount. It does not: under a standard fixed-payment schedule, the interest portion changes as the outstanding balance changes. Another is that APR and monthly interest rate are interchangeable. In this formula APR is entered as a yearly percentage, then divided by 1,200 to obtain the monthly decimal rate. The model also cannot account for variable rates, skipped or late payments, payment holidays, or contract-specific fees.

Frequently Asked Questions

How do I calculate a car loan payment?
Convert annual APR to a monthly decimal by dividing it by 1,200, multiply the term in years by 12, then use the payment formula shown above. The result is an estimated regular monthly payment, rounded to cents.

How do I make a car loan amortization schedule?
Start with the amount borrowed. For each month, multiply the opening balance by the monthly rate to get interest, subtract that interest from the payment to find principal paid, then subtract principal paid from the opening balance.

Does a longer car loan term reduce total interest?
Not generally when the APR and amount borrowed are unchanged. A longer term usually lowers the scheduled monthly payment but adds payment periods, which can increase total interest.

Why does my lender’s payment differ from this estimate?
The lender may use a different first-payment date, daily interest calculation, rounding method, or financed amount. Compare the inputs and ask the lender how its disclosed payment was calculated.

Does the calculator include a down payment or trade-in?
It does not calculate either separately. Account for them when determining the amount financed, then enter that principal as the loan amount.

This result is an estimate, and the lender’s disclosure gives the exact figures.

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in p | Loan amount | $ | 20000 | 1 | 100000000
in apr | Interest rate (APR) | % | 8 | 0.01 | 100
in yrs | Loan term | years | 5 | 0.0833 | 50
out pmt | Monthly payment | $ | p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2