Car Loan Calculator Monthly Payment and Payoff

This car loan calculator estimates your monthly payment and total interest from the loan amount, APR, and term. Enter the amount financed, annual percentage rate, and term in years to see the scheduled payment and interest over the full term; it does not calculate an early-payoff date or account for extra payments.

Formula

The calculator uses the standard fixed-rate, level-payment loan formula. It converts the annual percentage rate to a monthly rate, then finds the payment that repays the principal and interest in equal monthly installments:

Payment = P × r ÷ [1 − (1 + r)⁻ⁿ]

• P is the amount financed, in dollars.
• r is the monthly interest rate as a decimal: APR ÷ 1,200. For an 8% APR, r = 0.08 ÷ 12.
• n is the number of monthly payments: years × 12.
• Payment is the scheduled monthly principal-and-interest payment, in dollars, rounded to cents.

Total interest is estimated as the rounded monthly payment multiplied by the number of payments, minus the original loan amount: Total interest = Payment × n − P. Because the payment is rounded to cents, the final actual payment may differ slightly from the displayed regular payment.

Worked Example

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

1. Convert the APR to a monthly decimal rate: 8 ÷ 1,200 = 0.0066667.
2. Convert the term to payments: 5 × 12 = 60 months.
3. Substitute into the payment formula: $20,000 × 0.0066667 ÷ [1 − (1.0066667)⁻⁶⁰].
4. The rounded monthly payment is $405.53.
5. Using the rounded payment, total scheduled payments are $405.53 × 60 = $24,331.80. Estimated total interest is $24,331.80 − $20,000 = $4,331.80.

Assumptions

• The APR is fixed for the full term, and the loan is repaid in equal monthly installments.
• Payments are made monthly, with the first payment one month after the loan begins.
• Interest accrues monthly using APR divided by 12; this is a standard estimate and may not match a lender’s daily-interest method.
• The calculation excludes fees, taxes, insurance, optional products, and other charges unless they are included in the amount financed. It does not include a down payment as a separate input.

How to Use the Payment and Payoff Estimate

Enter the principal amount you expect to borrow—not necessarily the vehicle’s sticker price. The amount financed may reflect a down payment, trade-in value, or charges added to the loan. Use the APR and term shown in a lender’s written loan details for an estimate that is closer to the proposed contract. APR is an annualized borrowing-cost figure; it is not the monthly rate used directly in the formula.

The payment result is the scheduled amount for principal and interest. The interest result estimates the cost of borrowing if every scheduled payment is made on time and the loan runs for the full term. Neither figure is a quote or a complete ownership budget: vehicle insurance, maintenance, fuel, registration, and other costs are outside this calculation.

“Payoff” can mean two different things. A scheduled payoff means the balance reaches zero after all regular payments over the term. An early payoff means clearing the remaining balance sooner, often through additional principal payments. This calculator shows the first kind only. It cannot determine an early payoff date or exact payoff amount because it has no extra-payment amount, payment dates, lender-specific accrual method, or payoff fees as inputs.

What Changes the Payment and Total Interest

• Amount financed: Borrowing more raises the payment and generally increases total interest when the rate and term stay the same.
• APR: A higher input rate increases the calculated payment and interest. Enter the actual disclosed APR rather than guessing; the calculator does not predict the rate a lender may offer.
• Term: Spreading repayment over more months generally reduces the scheduled monthly payment, but means interest accrues for longer. Compare both payment and total interest rather than looking at the payment alone.
• Timing and rounding: Payment dates, daily interest calculations, and rounding can affect a lender’s statement and final installment. This formula rounds the regular payment to cents for its total-interest estimate.

Common Calculation Problems and Limits

A frequent mistake is entering a monthly percentage as though it were an APR, or dividing APR by 100 but not by 12. The input here is annual APR in percent, so the formula divides it by 1,200. Another common error is using the vehicle price instead of the amount actually financed. If a down payment or trade-in reduces the borrowing, reflect that by entering the resulting principal.

The estimate assumes one fixed rate and equal monthly payments. It will not model a changing rate, skipped or irregular payments, extra principal, a balloon payment, or a lender’s exact payoff quote. If the APR, financed balance, or term changes, recalculate with the updated figures. For an early payoff, ask the lender or servicer for the current payoff amount and how interest is calculated through the date the payment is received.

Frequently Asked Questions

How do I calculate a car loan monthly payment?
Convert APR to a monthly decimal by dividing it by 1,200, and convert the term to months. Apply the fixed-payment formula shown above to the amount financed, monthly rate, and number of payments.

Does the monthly payment include insurance and taxes?
No. The result estimates principal and interest only. Taxes or other charges affect it only if they are included in the amount financed; insurance and ongoing vehicle costs are not calculated.

Does total interest equal the exact amount I will pay?
It is an estimate based on a rounded regular payment and the stated assumptions. A lender’s interest method, payment dates, and final installment can produce a different total.

Can this calculator tell me when I can pay off my car early?
No. It assumes the scheduled payment and term. Estimating an early payoff requires extra-payment details, timing, and the lender’s current balance and interest method.

Why can a longer car loan have a lower monthly payment but more interest?
A longer term divides repayment across more installments, which can lower each scheduled payment. Interest is charged over more months, so the total interest can rise when other inputs are unchanged.

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