1. What is the Auto Loan Payment Formula?

The auto loan payment formula calculates the fixed monthly payment required to repay a car loan over a specified term. This is the standard formula used by Scotiabank and most financial institutions for fixed-rate auto loans.

2. How Does the Calculator Work?

The calculator uses the auto loan payment formula:

Where:

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

Explanation: The formula accounts for both principal and interest payments over the life of the loan, with more interest paid earlier in the loan term.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and ensures the loan is affordable. It also helps compare different loan offers.

4. Using the Calculator

Tips: Enter the loan amount in dollars, annual interest rate as a percentage (e.g., 5.99), and loan term in months (e.g., 60 for 5 years). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What interest rates does Scotiabank offer?
A: Rates vary based on credit score, loan term, vehicle age, and other factors. Current rates typically range from 3.99% to 19.99%.

Q2: What is the maximum loan term at Scotiabank?
A: Scotiabank offers terms up to 8 years (96 months) for new vehicles and up to 7 years (84 months) for used vehicles.

Q3: Are there any fees not included in this calculation?
A: This calculates principal and interest only. Additional costs may include taxes, registration, and optional insurance products.

Q4: Can I make extra payments to pay off loan faster?
A: Scotiabank allows extra payments on most auto loans, which can reduce total interest paid and shorten the loan term.

Q5: How accurate is this calculator?
A: This provides an estimate. Your actual payment may vary slightly due to rounding or specific loan terms from Scotiabank.