Car Loan Payment Calculator
A car loan payment calculator tells you the fixed monthly amount you will pay on an auto loan, given the amount borrowed, the annual interest rate and the length of the loan. It uses the standard amortization formula, the same math banks and credit unions use, which spreads principal and interest evenly so every monthly payment is identical. Early payments are mostly interest and later payments are mostly principal, but the total stays the same each month. This calculator takes the loan amount, the annual percentage rate and the term in years, converts the rate to a monthly figure, and returns the monthly payment, the total of all payments and the total interest paid. Enter a 30,000 dollar loan at 7 percent over 5 years and the tool returns a monthly payment of about 594.04 dollars. Seeing the monthly payment and the total interest side by side helps you judge whether a longer term, which lowers the monthly payment but raises total interest, is worth it. Because the formula is fixed and the inputs are yours, every figure is computed deterministically. The complete amortization formula and a worked example that reconciles exactly to the calculator above appear in full below.
A car loan payment uses the amortization formula: payment = L x r / (1 - (1 + r)^-n), where r is the monthly rate and n is the number of months. A $30,000 loan at 7% over 5 years costs $594.04 per month.
Car loan amortization formula
payment = L x r / (1 - (1 + r)^-n)
L = loan amount, r = annual rate / 12 (as a decimal)
n = number of monthly payments = years x 12
The annual rate is divided by 12 to get a monthly rate. The amortization formula then produces a level monthly payment that fully repays the loan over the term, covering both interest and principal.
Worked example
A 30,000 dollar car loan at a 7 percent annual rate over 5 years.
- Monthly rate r = 7% / 12 = 0.0058333
- Number of payments n = 5 x 12 = 60
- (1 + r)^-n = 1.0058333^-60 = 0.704596
- Payment = 30,000 x 0.0058333 / (1 - 0.704596) = 175.00 / 0.295404 = 594.04 dollars
These are the calculator's default inputs, so the result above matches the widget exactly.
Car Loan Payment Calculator: frequently asked questions
How is a car loan payment calculated?
It uses the amortization formula: the loan amount times the monthly rate, divided by one minus (one plus the monthly rate) to the power of minus the number of payments. This produces a level monthly payment that fully repays the loan over the term.
Does a longer term lower my payment?
Yes, a longer term spreads the principal over more months, which lowers each payment. But it also means you pay interest for longer, so the total interest rises. The calculator shows both so you can weigh the trade-off.
What rate should I enter?
Enter the annual percentage rate your lender quotes. The calculator converts it to a monthly rate internally. If you are shopping, try a few rates to see how much each point of interest changes the monthly payment and total cost.
Does this include taxes, fees or insurance?
No. It calculates principal and interest only. Sales tax, registration, dealer fees and auto insurance are separate costs. Add any financed fees to the loan amount if your lender rolls them into the loan.
Is borrowing for a car a good idea?
That depends on your budget and the rate. The US Securities and Exchange Commission's Investor.gov stresses understanding the full cost of borrowing before signing. Compare the total interest here against paying more upfront or choosing a cheaper vehicle.
Official sources
- Loans, interest and borrowing basics: US Securities and Exchange Commission, Investor.gov. As at 25 June 2026.
Reviewed by the CalculatorHub team, edited by James Graham, 25 June 2026. See our methodology. This is general information, not financial, tax, legal or investment advice.