Reckonary / Finance / Car loan
Estimated monthly payment
On top of the car, you'll pay $3,999 in interest over the life of the loan.
Same math, shown. No hidden assumptions.
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A car loan calculator turns a sticker price into the number that actually matters: your monthly payment. Enter the vehicle price, what you'll put down, any trade-in credit, your sales tax rate, the APR, and the loan term, and you'll see the payment along with how much of the deal is interest versus the amount you borrowed.
First it works out the amount financed: the vehicle price minus your down payment and trade-in, plus sales tax charged on the price. That balance is then amortized over your term, meaning each month's payment covers interest on the remaining balance plus a slice of the principal. The ledger bar under the result shows how much of your total payments goes to interest.
Take a $30,000 car with $5,000 down, no trade-in, no sales tax, a 6% APR, and a 60-month term. You finance $25,000, the payment lands at $483.32 a month, and you pay $3,999 in interest over the five years. Stretching that same loan to 72 months drops the payment to $414.32 but raises total interest to $4,831 — about $832 more for the convenience of a smaller monthly bill.
A house usually gains value while you pay it off. A car does the opposite: most new cars lose roughly 20% of their value in the first year and around half within five. Your loan balance, meanwhile, falls slowly at first, because early payments are mostly interest. For a while the car can be worth less than what you still owe — being "underwater" or "upside down" on the loan. That gap matters the day you want to sell, trade in, or total the car in an accident, because you have to cover the difference out of pocket.
Two choices keep that gap small: a real down payment, and a term that's no longer than you need.
The down payment is your head start against depreciation. Take a $35,000 car at 7% over 72 months and compare three down payments:
Putting 20% down instead of nothing cuts about $119 off every payment and saves roughly $1,592 in interest, and it shrinks the window where you owe more than the car is worth. That's also why rolling negative equity from an old loan into a new one is risky: it pushes you further underwater before you've driven a mile.
Stretching the term is the easiest way to hit a target monthly payment, and the easiest way to overpay. Here's the same $31,500 loan at 7% across five common terms:
Going from 36 to 84 months drops the payment by almost $500, but more than doubles the interest. The deeper problem is timing: on a seven-year loan you can spend most of the term underwater, and a car that age starts needing repairs while you're still making payments. A useful rule of thumb is to keep the term at 60 months or less, and to make sure the payment fits a budget where total car costs — including insurance, fuel, and maintenance — stay well under your comfort zone.
What does this car loan calculator include?
It finances the vehicle price minus your down payment and trade-in, then adds sales tax charged on the price. That balance is spread over your loan term at the APR you choose.
Is sales tax charged on the trade-in too?
Here, tax is applied to the full vehicle price for simplicity. Many states tax only the price after your trade-in, which lowers the bill, so check your local rule for an exact figure.
What's the difference between APR and interest rate?
The interest rate is the cost of borrowing the money. APR can also fold in certain lender fees, so it's usually a touch higher. This tool treats the rate you enter as the APR used to amortize the loan.
How can I lower my monthly payment?
A larger down payment or trade-in shrinks the amount financed, a longer term spreads it over more months, and a lower APR cuts the interest. A longer term lowers the payment but raises total interest paid.
Last reviewed June 2026. This tool is for education, not financial advice.