Bankrate Auto Loan Calculator With Trade In And Payoff

Auto Loan Payment Formula:

\[ P = price + tax + fees - D - trade\_value + owed\_on\_trade \] \[ PMT = P \times \frac{r (1 + r)^n}{(1 + r)^n - 1} \]

Vehicle Price:

Tax:

Fees:

Down Payment:

Trade-In Value:

Amount Owed on Trade:

Interest Rate:

Loan Term:

months

Loan Principal (P):

Monthly Payment (PMT):

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1. What is the Auto Loan Calculator?

This calculator helps determine your monthly auto loan payment when trading in a vehicle and accounting for any amount still owed on that trade-in. It uses the standard loan payment formula with adjustments for trade-in value and payoff amount.

2. How Does the Calculator Work?

The calculator uses two main formulas:

\[ P = price + tax + fees - D - trade\_value + owed\_on\_trade \] \[ PMT = P \times \frac{r (1 + r)^n}{(1 + r)^n - 1} \]

Where:

\( P \) — Loan principal amount
\( price \) — Vehicle purchase price
\( tax \) — Sales tax on purchase
\( fees \) — Additional fees
\( D \) — Down payment
\( trade\_value \) — Value of trade-in vehicle
\( owed\_on\_trade \) — Amount still owed on trade-in
\( PMT \) — Monthly payment
\( r \) — Monthly interest rate (annual rate ÷ 12)
\( n \) — Loan term in months

Explanation: The first formula calculates the net amount to be financed after accounting for all credits and debits. The second formula calculates the fixed monthly payment to repay that amount over the loan term.

3. Importance of Accurate Loan Calculation

Details: Understanding your exact monthly payment helps with budgeting and ensures you don't overextend yourself financially. The trade-in and payoff components are particularly important as they significantly affect the final loan amount.

4. Using the Calculator

Tips: Enter all known values - vehicle price is required, while other fields can be left at zero if not applicable. Interest rate should be your annual percentage rate (APR), and term should be in months (e.g., 60 for 5 years).

5. Frequently Asked Questions (FAQ)

Q1: How does a trade-in affect my loan?
A: Your trade-in value reduces the amount you need to finance, while any amount owed on the trade-in increases the loan amount.

Q2: Should I include taxes and fees?
A: Yes, for accurate results. These costs are typically rolled into the loan unless paid separately.

Q3: What if I don't have a trade-in?
A: Simply leave trade-in value and amount owed at zero.

Q4: How does the interest rate affect payments?
A: Higher rates significantly increase monthly payments, especially on longer-term loans.

Q5: Is this calculation accurate for all loans?
A: This provides a good estimate, but final terms may vary based on lender policies and creditworthiness.