Car Loan Amortization Schedule Calculator

This calculator estimates a car loan’s monthly payment and total interest from the amount financed, APR, and loan term. Enter those figures to see the payment and the total interest across the scheduled payments; the explanation below shows how to calculate each month’s principal, interest, and remaining balance.

Formula

A standard amortizing loan uses equal monthly payments. The payment formula is:

M = P × r ÷ [1 − (1 + r)⁻ⁿ]

• M is the calculated monthly payment in dollars.
• P is the amount financed in dollars, not necessarily the vehicle’s sticker price.
• r is the monthly interest rate, calculated as APR ÷ 1,200 when APR is entered as a percentage per year.
• n is the number of monthly payments, calculated as years × 12.

The calculator’s first result rounds the payment to cents. Total interest is calculated as the rounded payment multiplied by the number of months, minus the original amount financed: I = M × n − P. This reflects the scheduled total of payments in this estimate. An actual lender’s payment schedule can differ because of payment dates, rounding conventions, fees, or other contract details.

Worked Example

Using the calculator’s default inputs—$20,000 financed, 8% APR, and 5 years—the loan has 60 monthly payments.

1. Convert annual APR to a monthly rate: r = 8 ÷ 1,200 = 0.0066667, or about 0.66667% per month.
2. Set the number of payments: n = 5 × 12 = 60.
3. Substitute into the payment formula: M = 20,000 × 0.0066667 ÷ [1 − (1.0066667)⁻⁶⁰].
4. The unrounded payment is about $405.53, so the calculator’s displayed monthly payment is $405.53.
5. Using that rounded payment, scheduled payments total $405.53 × 60 = $24,331.80. Estimated total interest is $24,331.80 − $20,000 = $4,331.80.

How to Build the Monthly Amortization Schedule

The calculator gives the level payment and total interest, but a full amortization schedule shows how each payment is divided between interest and principal. Start with the initial balance, then repeat these calculations for every month:

• Interest for the month = beginning balance × monthly rate.
• Principal repaid = monthly payment − interest for the month.
• Ending balance = beginning balance − principal repaid.

For example, in month one of the worked example, interest is $20,000 × 0.0066667, or about $133.33. Subtracting that from the $405.53 payment leaves about $272.20 to reduce principal. The balance after that payment is approximately $19,727.80. In the next month, interest is calculated on this lower balance, so a slightly larger share of the same payment goes to principal.

Repeat the process using the preceding month’s ending balance as the next month’s beginning balance. Because statements typically show amounts rounded to cents, individual schedule rows can differ by a cent from calculations that retain more decimal places. The final payment may also be adjusted to clear the remaining balance.

What the Results Mean

The monthly payment is the scheduled amount for principal and interest under the formula’s assumptions. It is not necessarily the complete monthly cost of owning or financing a car. The total-interest result estimates the interest paid over all scheduled payments; it does not include charges that are outside the principal-and-interest calculation.

To estimate the loan amount from a vehicle transaction, distinguish the amount financed from the vehicle price. A down payment or trade-in value can reduce the balance financed; eligible taxes, fees, optional products, or existing debt included in a contract can change it. Enter the actual amount financed from the lender’s disclosure when available, rather than assuming it equals the advertised vehicle price.

When to Use It and Common Errors

Use an amortization calculation to understand the mechanics of a fixed-payment auto loan, check a quoted payment, or compare hypothetical combinations of loan amount, APR, and term. It is an arithmetic estimate, not a determination of eligibility or a recommendation about borrowing.

• Entering APR as a decimal: For an 8% APR, enter 8, not 0.08. The formula divides the percentage by 1,200 to obtain the monthly rate.
• Using years as months: A five-year term means 60 payments. The calculator converts years to months.
• Using the wrong principal: The loan amount should be the amount financed, not automatically the vehicle’s price or the amount remaining after a payment.
• Expecting interest to be equal every month: In a standard amortizing loan, interest usually declines as the balance declines, while the scheduled payment stays level.
• Ignoring cents and timing: Rounding each payment or schedule row can create small differences. A lender may also use its contractual payment dates and calculation method.

Assumptions

• The APR and payment amount remain fixed for the full term.
• Payments are made monthly, with the first payment one month after the loan begins.
• Interest is calculated monthly using APR ÷ 12, with APR entered as a percentage (equivalent to APR ÷ 1,200 as a decimal rate).
• The estimate excludes fees, taxes, insurance, and other charges unless those costs are included in the amount financed. It does not model late payments, skipped payments, extra principal payments, or a changing rate.

For a lender’s quoted figures, use the disclosed amount financed, APR, payment schedule, and any applicable charges. This result is an estimate, and the lender’s disclosure gives the exact figures.

Frequently Asked Questions

How do I calculate a car loan payment by hand?
Convert APR to a monthly decimal rate by dividing the percentage by 1,200, convert the term to months, then use the fixed-payment formula shown above. Round the resulting payment to cents.

How do I calculate the interest portion of a car payment?
Multiply the balance at the start of that month by the monthly rate. Subtract that interest from the payment to find how much goes toward principal.

Does a longer car loan term reduce total interest?
For the same principal and positive APR, extending the term generally lowers the scheduled monthly payment but increases the number of payments and the total interest under this formula. The calculator can show the arithmetic for different terms without evaluating which term is appropriate.

Does this schedule include a down payment?
No separate down-payment input is provided. A down payment affects the schedule only if it reduces the loan amount entered as the amount financed.

Why does my lender’s payment differ from the estimate?
The contract may use a different financed amount, APR, payment timing, rounding method, or fees, or may include a final payment adjustment. Compare the calculator’s inputs with the figures in the lender’s disclosure.

Related

• Auto Loan Calculator With Trade-In and Amount Owed (Negative Equity)
• Car Loan Calculator With Down Payment: Monthly Car Payment

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