1. What is the Car Loan Amortization Calculator?

This calculator determines your monthly car loan payment and generates a complete amortization schedule showing how each payment is split between principal and interest over the life of your loan.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( P \) — Principal loan amount (USD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Number of monthly payments (term in months)
• \( PMT \) — Monthly payment amount (USD)

Explanation: The formula calculates the fixed monthly payment required to fully repay a loan over its term, accounting for compound interest.

3. Importance of Loan Amortization

Details: Understanding your amortization schedule helps you see how much interest you'll pay over the life of the loan and how extra payments can reduce your total interest costs.

4. Using the Calculator

Tips: Enter the total loan amount, annual interest rate, and loan term in months. The calculator will show your monthly payment and a complete payment-by-payment breakdown.

5. Frequently Asked Questions (FAQ)

Q1: Why does most of my early payment go toward interest?
A: This is how amortization works - early payments have more interest because the outstanding balance is higher.

Q2: How can I pay less interest overall?
A: Make extra principal payments, choose a shorter loan term, or secure a lower interest rate.

Q3: What's the difference between APR and interest rate?
A: APR includes both interest rate and loan fees, giving a more complete cost picture.

Q4: Are there prepayment penalties?
A: Some loans have penalties for early payoff - check your loan agreement.

Q5: How does a larger down payment affect my loan?
A: A larger down payment reduces your loan amount, resulting in lower monthly payments and less total interest.