Car Loan Calculator Monthly Payment and Payoff Amount

This car loan calculator estimates your monthly payment and total interest from the amount financed, APR, and loan term. Enter those three figures to see the level monthly payment and the interest paid over the full term; it does not calculate a payoff quote for a specific date.

Formula

The calculator uses the standard fixed-payment amortizing-loan formula. It first calculates the unrounded payment from the rate and term, rounds that payment to the nearest cent, and then uses the rounded payment to calculate total interest.

• P is the loan amount in dollars.
• APR is the annual percentage rate entered as a percentage.
• r is the monthly rate, calculated as APR ÷ 1,200.
• n is the number of monthly payments, calculated as years × 12.
• M is the monthly payment in dollars: M = round[P × r ÷ (1 − (1 + r)⁻ⁿ), 2].
• I is total interest in dollars: I = M × n − P.

This formula assumes equal payments at regular monthly intervals and a fixed rate. The payment covers interest due for the period and reduces the principal. The calculator’s total interest is an estimate based on the rounded monthly payment; a lender’s actual schedule can differ because of payment dates, rounding practices, or other account details.

Worked Example

Using the calculator’s default inputs: a $20,000 loan, 8% APR, and a five-year term.

1. Convert the APR to a monthly rate: r = 8 ÷ 1,200 = 0.0066667.
2. Convert the term to payments: n = 5 × 12 = 60.
3. Substitute into the payment formula: M = 20,000 × 0.0066667 ÷ [1 − (1.0066667)⁻⁶⁰].
4. The result is approximately $405.53 per month when rounded to cents.
5. Calculate interest using the displayed payment: $405.53 × 60 − $20,000 = $4,331.80.

So the calculator displays an estimated monthly payment of $405.53 and estimated total interest of $4,331.80 across 60 payments. The payment times the number of months gives total scheduled payments of $24,331.80; subtracting the $20,000 principal gives the interest estimate.

Assumptions

• The interest rate stays fixed throughout the loan.
• Payments are equal and made monthly, beginning according to the lender’s schedule.
• Interest is treated as compounding monthly at APR ÷ 12.
• The calculation excludes fees, taxes, insurance, optional products, and any other amount not included in the entered loan amount.
• It does not model late payments, skipped payments, extra principal payments, or a changing rate.

Monthly Payment Versus Payoff Amount

These figures answer different questions. The monthly payment is the scheduled amount due under the assumed loan terms. The total interest is the estimated interest paid over the entire term if every scheduled payment is made as modeled. Neither is the same as the payoff amount needed to close an existing loan on a particular date.

A payoff amount is generally tied to a date and the account’s current balance. It may include interest that has accumulated since the last payment, and the lender may account for payment processing or other contract-specific items. This calculator has no inputs for payment history, payoff date, or lender charges, so it cannot produce that exact figure. Contact the lender or loan servicer for a dated payoff quote before sending a final payment.

Likewise, the entered loan amount should be the amount actually financed, not necessarily the vehicle’s advertised price. A down payment or trade-in can reduce the amount financed, while items added to the transaction can increase it. Use the figure shown in the loan documents or obtain the proposed amount from the lender; do not assume the calculator knows the transaction’s taxes or fees.

When to Use the Estimate

Use the calculator to understand how principal, APR, and term work together in a straightforward fixed-rate loan. It can help you compare mathematical scenarios by changing one input at a time, without implying that any particular loan is available or appropriate. For an accurate estimate, enter the lender’s quoted APR and term and the exact amount financed. Rates, fees, and other terms should be obtained directly from the lender.

A longer term spreads repayment across more monthly payments, which can lower the scheduled payment while leaving the balance outstanding longer. Since interest is charged against unpaid principal, a longer term can also increase total interest under the same rate and principal. The calculator shows this arithmetic, but it does not assess a household budget or determine whether a loan can be approved.

Common Input and Calculation Mistakes

• Entering 0.08 instead of 8: APR is entered as a percentage, so enter 8 for 8%, not 0.08.
• Using the car price as the loan amount: The amount financed may differ from the vehicle price. Enter the actual principal used for the loan estimate.
• Confusing years and months: The term field is in years; the formula converts it to months by multiplying by 12.
• Treating total interest as a payoff figure: Total interest is a full-term estimate, not the balance due today.
• Expecting exact lender figures: Rounding to cents and account-specific timing can cause small differences from a lender’s payment schedule or payoff quote.

The formula is not designed for variable-rate loans, irregular payment schedules, a balloon payment, or a loan with extra payments. For those cases, a calculation needs additional inputs and a different repayment model. A basic estimate also cannot include charges unless they are reflected in the amount financed or modeled separately.

Frequently Asked Questions

How do I calculate a car loan monthly payment?
Use the loan amount, monthly interest rate (APR ÷ 1,200), and number of monthly payments in the fixed-payment formula. This calculator performs that calculation and rounds the result to cents.

Does this calculator show my car loan payoff amount?
No. It estimates the scheduled payment and full-term interest. A payoff amount for an existing loan depends on the current account balance and requested payoff date, so ask the lender or servicer for a dated quote.

Why is my lender’s payment different?
The entered principal, APR, or term may differ from the lender’s figures. The lender may also use payment-date conventions, rounding, or amounts not included in this estimate. Compare the calculator inputs with the loan disclosure.

Does the total interest include taxes and fees?
No. Total interest is calculated from the entered principal, APR, and term. Costs not included in the principal are not represented as separate charges by this calculator.

Can extra payments reduce the amount of interest?
Paying additional principal can change a loan’s balance and repayment schedule, but this calculator assumes only the same scheduled payment each month. Check with the lender about how additional payments are applied and use a model that includes them for an estimate.

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

Related

• Auto Loan Payoff Calculator With Extra Payments
• Car Loan Payment Calculator With Interest Rate
• Auto Loan Refinance Calculator Monthly 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