Auto Loan Calculator

Work out your monthly car payment before you sign anything. Enter the vehicle price, your down payment and trade-in, the APR and the term, and this free auto loan calculator shows your monthly payment, the amount financed, the total interest, the total cost of the loan and a full month-by-month amortization schedule. With the defaults below — a $35,000 car, $3,500 down, 6.35% APR over 60 months — the monthly payment is $614.12, the total interest is $5,347.37 and the total paid is $36,847.37.

Most Americans finance a car for around 69 months, and the average new-car payment in the United States was $765 a month in the second quarter of 2026, according to Experian. Use the calculator to see where your deal sits against that average, and to test what a bigger down payment, a shorter term or an extra $100 a month does to your total cost.

How Auto Loan Payments Work

An auto loan is a simple deal on the surface: a lender gives you money to buy a car, and you pay it back in equal monthly instalments over a fixed term, usually between 24 and 84 months. Each monthly payment is split into two parts. One part pays the interest the lender charges for that month, and the rest reduces the amount you still owe, which is called the principal. Early in the loan, most of your payment goes to interest because the balance is at its highest. As the balance falls, the interest part shrinks and the principal part grows, so the same fixed payment pays off more and more of the car each month. That is why the first payment on the default loan above is $166.69 of interest and $447.44 of principal, while the last payment is almost entirely principal.

Most car loans in the United States use simple interest on the declining balance. Interest is charged only on the amount you still owe, month by month, so every extra dollar you pay goes straight to principal and cuts the interest on every month that follows. A small number of lenders still use precomputed interest, where the total interest is fixed up front and added to the loan, which makes early payoff far less rewarding. The calculator on this page assumes the standard amortizing simple-interest loan that most banks, credit unions and manufacturer finance arms use, and the content below flags the precomputed trap so you can check your own contract before you sign.

What the lender actually charges you for

Three numbers decide the size of your payment: how much you borrow, the annual percentage rate, and how many months you take to repay it. Borrowing more, paying a higher rate, or stretching the term all push the total cost up, but they do it in different ways. A longer term cuts the monthly payment while raising the total interest sharply, because you pay interest for more months on a balance that falls more slowly. A higher rate raises both the payment and the total interest. A bigger down payment is the only change that cuts both at once, because it shrinks the amount you borrow in the first place.

• Amount financed: the vehicle price minus your down payment and trade-in, plus any amount still owed on the trade-in, plus sales tax and fees you choose to roll into the loan.
• APR: the annual cost of borrowing, including lender fees. A lower APR always means a cheaper loan for the same amount and term.
• Term: the number of monthly payments. Shorter terms cost more per month and far less in total interest.
• Extra payments: any amount above the scheduled payment goes to principal and shortens the loan.

Dealers often steer the conversation toward the monthly payment alone, because a low payment can hide an expensive loan. A $527 monthly payment over 72 months costs $6,463.15 in interest on the default loan, while a $614 payment over 60 months costs $5,347.37. The cheaper-looking payment is the more expensive loan by more than $1,100. Always compare the total interest and the total paid, not just the monthly figure, and use the comparison table in the calculator result to see the trade-off for your own numbers.

The Auto Loan Formula

Every monthly car payment comes from one formula, the standard amortization formula used by banks across the United States. If P is the amount financed, r is the monthly interest rate (the annual APR divided by 12) and n is the number of monthly payments, the monthly payment M is P times r times (1 + r) to the power n, divided by (1 + r) to the power n minus 1. The formula looks intimidating, but it only says that the payment must be large enough to cover each month’s interest and still clear the whole balance by the final month.

Worked example: the $35,000 default

Take the defaults above. The car costs $35,000 and you pay $3,500 down, with no trade-in, no tax and no fees, so the amount financed is $35,000 minus $3,500, which is $31,500. The APR is 6.35%, so the monthly rate is 0.0635 divided by 12, or 0.0052917. Over 60 months, the formula gives a monthly payment of $614.12. Multiply that by 60 payments and you get $36,847.37 paid in total, of which $5,347.37 is interest and $31,500 is the principal you borrowed.

The first month shows how the split works. Interest for month one is the balance of $31,500 times the monthly rate of 0.0052917, which is $166.69. Subtract that from the $614.12 payment and $447.44 goes to principal, leaving a balance of $31,052.56 for month two. In month two the interest is slightly lower, because it is charged on the smaller balance, and the principal part is slightly higher. By the final month the interest is only a few dollars and almost the whole payment clears principal. The amortization schedule in the result above shows every month of that journey.

1. Find the amount financed. Price minus down payment minus trade-in, plus anything owed on the trade-in, plus tax and fees.
2. Find the monthly rate. Divide the APR by 12 and by 100. At 6.35% that is 0.0052917.
3. Apply the amortization formula. That gives the fixed monthly payment.
4. Check the first month. Interest equals the balance times the monthly rate; the rest of the payment is principal.
5. Repeat for every month. Each month the balance falls, the interest falls with it, and the principal share rises.

If you want to check the calculator by hand, the loan payment calculator uses the same formula for any kind of loan, and the mortgage calculator applies the identical maths to a home loan over a much longer term. The formula never changes; only the amount, the rate and the term do.

What the Average American Pays in 2026

Knowing the national averages helps you judge whether your own deal is fair. The figures below come from Experian’s State of the Automotive Finance Market report for the second quarter of 2026, with Edmunds and Kelley Blue Book figures alongside. The average new car now costs more than $50,000, the average amount financed is over $43,000, and the average new-car buyer pays $765 a month. Used-car buyers pay less per month but at a much higher rate, which is why the used-car market deserves extra care.

Two things stand out. First, the average term is now close to 69 months, which means most buyers are still paying for a car that is nearly six years old. Second, the gap between the average new-car rate (6.35%) and the average used-car rate (11.19%) is almost five percentage points, which is why a used car that looks cheap can be expensive to finance. On a $31,500 loan over 60 months, the new-car rate costs $5,347.37 in interest, while the used-car rate costs $9,772.49 — a difference of $4,425.12 for the same amount borrowed. If you are buying used, a larger down payment or a shorter term is the simplest way to limit that damage.

Your own rate depends mostly on your credit score, which is covered in the next section, and on whether you borrow from a bank, a credit union or the dealer’s finance office. Credit unions often beat dealer rates by a full percentage point or more, and an offer in writing from your own bank is the strongest negotiating tool you can take into a dealership.

Auto Loan Rates by Credit Score

Lenders sort borrowers into tiers by credit score, and the rate jumps between tiers are large. The table below uses Experian’s second-quarter 2026 averages by VantageScore 4.0 tier. A super-prime borrower pays 4.41% on a new car; a subprime borrower pays 13.52% on the same car — more than three times as much. On a $31,500 loan over 60 months, that difference is worth thousands of dollars, which is why improving your score before you buy is often the highest-paying work you can do.

Check your own credit report before you shop. Federal law gives you a free weekly report from each of the three bureaus, and many banks show your score free inside their app. Look for errors, old collections and high card balances, because all three drag your score down. Paying down a credit card balance by even a few hundred dollars can lift a score across a tier boundary in a month or two, and crossing from near prime to prime can cut your rate by more than three percentage points.

• Super prime (781–850): the best rates and the widest choice of lenders. Dealers compete for these buyers.
• Prime (661–780): close to the national average rate. Most buyers sit in this band.
• Near prime (601–660): rates jump sharply. A credit union or a co-signer can help here.
• Subprime (501–600): expensive borrowing. A bigger down payment and a shorter term limit the damage.
• Deep subprime (below 500): very high rates, often above 20% on used cars. Buying a cheaper car with cash, or waiting and rebuilding credit, is usually better than borrowing at these rates.

Remember that the rate you are offered also depends on the lender’s own pricing and on the car itself. New cars from the manufacturer’s finance arm sometimes carry promotional rates as low as 0% for well-qualified buyers, while independent used-car lots often mark rates up. Always compare at least three offers, and make sure each quote is for the same amount, term and down payment so the comparison is honest.

New vs Used: Why the Rate Gap Matters

The used-car rate is nearly double the new-car rate, and that gap changes the maths of the whole purchase. Take the default $31,500 loan over 60 months. At the new-car average of 6.35%, the payment is $614.12 and the total interest is $5,347.37. At the used-car average of 11.19%, the same loan costs $687.87 a month and $9,772.49 in interest. The used-car buyer pays $73.75 more every month and $4,425.12 more in total, for the same amount borrowed over the same term.

That does not mean buying used is a bad idea. Used cars cost far less to buy, so the loan is usually smaller, and a car that is two or three years old has already taken its biggest depreciation hit. The mistake is to compare a new car and a used car on monthly payment alone. Compare the total cost instead: purchase price, plus interest, plus insurance, plus expected repairs. A $25,000 used car at 11.19% over 60 months costs about $545 a month, while a $35,000 new car at 6.35% costs $614 a month. The used car is still cheaper each month, but the gap is much smaller than the $10,000 price difference suggests, because the higher rate eats much of the saving.

How to make a used-car loan cheaper

• Put more down. Every extra $1,000 down cuts the amount financed and the interest on it.
• Take a shorter term. A 36-month used-car loan at 11.19% on $31,500 costs $1,034 a month but only $5,730 in interest, against $9,772 over 60 months.
• Borrow from a credit union. Credit unions often lend on used cars at rates one to two points below dealer finance.
• Get a pre-purchase inspection. A $150 inspection can save thousands in repairs, and a car with a clean inspection is easier to finance.
• Check the car’s history. Accidents, flood damage and title problems all raise the lender’s risk and your rate.

The calculator’s new and used quick-fill buttons let you switch between the two average rates instantly, so you can see the cost of each choice on your own numbers before you decide.

Term Length: 36 vs 48 vs 60 vs 72 vs 84 Months

The term is the most powerful lever you have after the price, and it works against your monthly budget. Stretching the term lowers the payment but raises the total interest, because you owe the money for longer and the balance falls more slowly. The table below runs the default $31,500 loan at 6.35% across every common term, so you can see the trade-off in plain dollars.

Moving from 60 months to 72 months saves $86.85 a month but costs $1,115.78 more in interest. Moving from 60 to 84 months saves $148.65 a month and costs $2,252.37 more in interest. The 84-month loan is also the riskiest: cars lose value fastest in the first years, so a seven-year loan almost guarantees a period when you owe more than the car is worth, which is called negative equity. If the car is written off or you need to sell it, you would have to pay the lender the difference out of pocket.

• 36 months: the cheapest loan by far, but the payment is steep. Best if your income comfortably covers it.
• 48 months: a good middle ground — a manageable payment with only $4,252.50 of interest on the default loan.
• 60 months: the most common term in the United States, and the default on this page. Reasonable for most buyers.
• 72 months: acceptable for a reliable new car you plan to keep for many years, but the interest cost jumps.
• 84 months: best avoided unless the monthly payment is genuinely unaffordable any other way. The car will be old before it is yours.

A useful rule is to match the term to how long you will keep the car. If you usually trade in after four years, a 48-month loan means you own the car outright when you sell it. If you keep cars for ten years, a 60- or 72-month loan is less risky, because you will still own the car long after the loan ends. Never take a longer term just to afford a more expensive car — that is how buyers end up paying $39,099.74 for a $35,000 car.

The 10 Percent Rule and Other Affordability Rules

NerdWallet’s best-known guidance is the 10 percent rule: keep your total monthly car payment under 10% of your monthly take-home pay. On a take-home pay of $5,000 a month, that means a payment under $500. The default loan on this page costs $614.12 a month, so it would need take-home pay of about $6,141 a month to pass the rule. If your payment is above 10%, the car is probably stretching your budget, and a cheaper car or a bigger down payment is the honest fix. You can cross-check the payment on the NerdWallet auto loan calculator as well, which uses the same amortisation maths.

The 20/4/10 rule

A stricter version is the 20/4/10 rule: put at least 20% down, take a term of no more than 4 years, and keep the total monthly car cost under 10% of your gross monthly income. On a $35,000 car, that means $7,000 down, a 48-month loan, and a payment that fits the 10% limit. Few buyers meet all three parts, but the rule is a useful target: the closer you get, the cheaper and safer the loan.

Count the whole cost, not just the payment

The monthly payment is only part of what a car costs. Insurance on a financed car is higher, because the lender requires full coverage, and a new car costs more to insure than an older one. Fuel, maintenance, tyres and repairs add hundreds a month. Before you commit, add up the whole monthly cost and check it against your budget with the salary calculator to see what your pay really leaves each month.

• Monthly payment: the loan payment from the calculator above.
• Insurance: full coverage is usually required while the loan is open.
• Fuel: work it out from your weekly miles and the car’s real fuel economy.
• Maintenance and repairs: budget at least $100 a month for a used car, less for a new car under warranty.
• Registration and taxes: annual costs that are easy to forget until the bill arrives.

If the whole monthly cost is more than about 20% of your take-home pay, the car is probably too expensive for your budget, whatever the monthly payment looks like on its own.

Down Payment and Trade-In: How They Change the Loan

Every dollar of down payment or trade-in value cuts the amount you borrow, and therefore cuts both the payment and the interest. The table below keeps the $35,000 price, 6.35% APR and 60-month term fixed and changes only the down payment, so the effect is easy to see.

Raising the down payment from $0 to $5,000 cuts the payment by $97.48 a month and saves $848.79 in interest. Raising it to $7,000, the 20% mark on a $35,000 car, cuts the payment to $545.89 and the interest to $4,753.22. A trade-in works the same way, with one catch: if you still owe money on the car you are trading in, the amount owed is added back to the new loan. A $5,000 trade-in with $3,000 still owed only reduces the amount financed by $2,000, and the calculator’s “still owed” field handles exactly that case.

1. Save the down payment first. Even $1,000 down beats $0 down, and $3,500 beats $1,000.
2. Get the trade-in value separately. Get a written offer from a second dealer or an online buyer before you negotiate, so you know what the car is really worth.
3. Do not roll negative equity forward. If you owe more than the trade-in is worth, paying the difference in cash is painful but far cheaper than financing it into the next loan at a higher balance.
4. Keep the down payment out of the monthly negotiation. Agree the car price first, then the trade-in value, then the financing, so the dealer cannot hide a low trade-in inside a low payment.

If you are deciding how much to put down, the compound interest calculator can show what the same money would earn if you invested it instead — but for most buyers, the guaranteed return of avoiding 6.35% interest beats the uncertain return of an investment.

Extra Payments: How Much Can You Save?

Paying even a little extra each month is the cheapest way to cut the cost of a car loan, because every extra dollar goes straight to principal and reduces the interest on every month that follows. The table below shows what extra payments do to the default $31,500 loan at 6.35% over 60 months.

An extra $100 a month finishes the loan nine months early and saves $880.34 in interest. An extra $200 a month finishes it sixteen months early and saves $1,507.83. The effect is strongest early in the loan, when the balance is highest, so starting extra payments in the first year beats starting them in the third. Before you send extra money, check two things: that your lender applies extra payments to principal rather than to future scheduled payments, and that there is no prepayment penalty. Most US auto loans have no prepayment penalty, but a few subprime contracts do, so read the agreement.

• Round the payment up. Paying $650 instead of $614.12 is a $35.88 extra payment you will barely notice.
• Send windfalls to the loan. A tax refund, a bonus or a rebate applied to principal cuts months off the loan.
• Pay every two weeks if you can. Half a payment every two weeks adds up to 26 half-payments a year, which is 13 monthly payments instead of 12 — effectively one extra payment a year.
• Keep the habit after the loan ends. The payment you were making becomes your next down payment fund.

APR vs Interest Rate: What Is the Difference?

The interest rate is the price of borrowing the money itself. The APR, the annual percentage rate, is the interest rate plus the lender’s fees, spread over the life of the loan and expressed as a yearly rate. Because the APR includes fees, it is always the same as or higher than the interest rate, and it is the number you should compare between lenders. Two loans can have the same interest rate and different APRs if one lender charges higher fees, and the loan with the lower APR is the cheaper one.

By law, US lenders must disclose the APR on every consumer loan, which makes it the honest comparison tool. When a dealer advertises 0% financing, that is the APR, and it usually means the manufacturer is paying the interest for you as a sales incentive — but the low rate may come with a higher car price or the loss of a cash rebate, so compare the total cost of the deal, not just the rate. If one offer is 0% with no rebate and another is 6.35% with a $2,000 rebate, the rebate deal can be cheaper overall on a $31,500 loan, and the calculator above will show you exactly by how much.

• Interest rate: the cost of the money alone, before fees.
• APR: the cost of the money plus lender fees, as a yearly rate. Compare APRs, not interest rates.
• 0% deals: real, but often tied to a higher price or a lost rebate. Compare the total paid.
• Dealer mark-up: dealers sometimes add a margin to the lender’s rate. An offer in writing from your own bank stops that.

Sales Tax, Title and Fees on a Car Purchase

The price on the window sticker is not the price you finance. Sales tax, title, registration and documentation fees are added on top, and on a $35,000 car they can easily add $2,000 or more. The calculator above has fields for the sales tax rate and for fees, so you can see the true amount financed rather than the sticker price.

How sales tax works on a car

Sales tax on a car is set by the state and often by the county or city as well, so the rate depends on where you register the car, not where you buy it. Rates run from 0% in states with no sales tax to over 10% in some cities when state and local taxes combine. Most states charge the tax on the price after the trade-in credit, which is why the calculator uses the price minus the trade-in as the taxable amount, but a few states tax the full price, so check your state rule. If your state rate is 6% and the taxable price is $31,500, the tax is $1,890, which is either paid up front or rolled into the loan. Rolling it into the loan means you also pay interest on the tax.

Fees to expect

• Documentation fee: what the dealer charges for paperwork, usually $85 to $500 depending on the state. Some states cap it by law.
• Title and registration: the state’s charge to register the car in your name, often $100 to $400.
• Destination charge: the cost of shipping the car to the dealer, usually $1,000 to $1,500 on a new car, and normally included in the sticker price.
• Dealer add-ons: paint protection, fabric coating, nitrogen-filled tyres and similar extras are usually poor value. Say no to any add-on you did not ask for.

Our sales tax calculator covers the general rules for all 50 states, including which states charge no sales tax at all, if you want to check your own state’s rate before you buy.

Precomputed Interest and Other Traps

Most auto loans are simple-interest loans, but a small number — usually from buy-here-pay-here lots and some subprime lenders — use precomputed interest, also called the Rule of 78s. With precomputed interest, the total interest is calculated up front and added to the loan, and if you pay the loan off early you still owe most of the interest. The calculator on this page assumes simple interest, so if your contract says “precomputed” or “Rule of 78s”, the numbers here will understate your cost and you should walk away.

Dealer add-ons that inflate the loan

The finance office is where dealers make much of their profit. Extended warranties, GAP insurance, paint protection and tyre-and-wheel packages are offered at high mark-ups and rolled into the loan, where you pay interest on them for years. GAP insurance can be worth having if your down payment is small, because it covers the gap between the loan balance and the car’s value if the car is written off, but buy it from your own insurer, where it usually costs far less than the dealer’s price.

Negative equity and rolling it forward

Negative equity means you owe more than the car is worth. It happens most often with small down payments, long terms and fast-depreciating cars. Rolling negative equity into the next loan — financing the old shortfall on top of the new car — is the fastest way to stay underwater for years. If you owe $3,000 more than your trade-in is worth, the honest options are to pay the $3,000 in cash, keep the old car longer until the balance falls below its value, or sell the car privately for more than the trade-in offer. The loan payment calculator can show you what the rolled-over balance would cost before you agree to it.

How to Get the Best Auto Loan Rate

The cheapest auto loan is almost never the first offer you hear. Lenders compete, and the difference between the best and the worst offer for the same borrower can be two percentage points or more. Treat rate shopping like any other comparison: gather real offers, compare them on identical terms, and negotiate with the best one in hand.

1. Check your credit first. Get your free reports, fix errors, and pay down card balances before you apply.
2. Get pre-approved by your bank or credit union. A written offer sets the ceiling the dealer must beat.
3. Apply to several lenders within 14 days. Multiple auto-loan applications inside a short window count as a single hard inquiry for credit scoring purposes, so shopping around does not damage your score the way people fear.
4. Negotiate the price, not the payment. Agree the car price first, then the trade-in, then the financing.
5. Compare APRs on identical terms. Same amount, same term, same down payment — then the lowest APR wins.
6. Read the contract before you sign. Check for precomputed interest, prepayment penalties, and add-ons you did not agree to.

• Credit unions often beat banks and dealers by a full point or more, especially on used cars.
• Manufacturer finance sometimes offers 0% or low promotional APRs to well-qualified buyers, but check whether taking the low rate costs you a cash rebate.
• Online lenders give fast decisions and let you compare without visiting a dealership.
• A co-signer with strong credit can cut the rate sharply, but the co-signer takes on the full debt if you cannot pay.

For a broader view of how interest compounds against you over time, the compound interest calculator shows the same maths working in reverse — interest working for you instead of against you — which is a good reason to keep loan terms short and invest the difference.

Auto Loan vs Lease vs Cash

Financing is only one way to get a car. Leasing and paying cash each suit different drivers, and the right choice depends on how long you keep cars and how many miles you drive. The table below compares the three routes for the same $35,000 car.

Leasing looks cheap per month because you only pay for the car’s depreciation during the lease, not its full price. But you never own the car, and excess mileage charges of 20 to 30 cents a mile add up fast. Cash is the cheapest route overall, because there is no interest at all, but it ties up money that could be earning a return elsewhere. For most buyers who keep cars for five years or more, a short loan with a solid down payment is the best balance of cost and freedom.

The 2026 Auto Loan Interest Deduction

The One Big Beautiful Bill Act, signed in 2025, created a new federal deduction for auto loan interest, with the IRS issuing proposed rules during 2026. In broad terms, the deduction applies to interest on loans for new, assembled-in-the-United-States vehicles bought for personal use, subject to income limits and a cap on the amount deducted. The details, including exactly which vehicles qualify and how the income limits work, are still being finalised as the IRS writes the rules.

Do not build this deduction into your loan maths. The calculator above shows the gross interest, because the deduction reduces your tax bill rather than your loan payment, and whether you can claim it depends on your income, your filing status and the vehicle. If you buy a qualifying new car, keep your loan statements and check the current IRS rules when you file. A deduction worth a few hundred dollars a year is a welcome bonus, but it should never be the reason to borrow more than you can afford.

Frequently Asked Questions

What is a good auto loan rate in 2026?

For a new car, the national average is 6.35% and the best-qualified borrowers pay around 4.41%. For a used car, the average is 11.19% and the best rates are around 6.29%. Your own rate depends on your credit score, the lender and the car, so compare at least three written offers before you decide.

How much is the monthly payment on a $30,000 car loan?

At 6.35% APR over 60 months, a $30,000 loan costs $584.88 a month, with $5,092.74 of total interest. Over 48 months the same loan costs $709.37 a month, and over 72 months it costs $502.16 a month, but the total interest rises to $6,155.38.

Is a 72-month auto loan a bad idea?

Not always, but it costs more and carries more risk. On the default $31,500 loan at 6.35%, a 72-month term costs $1,115.78 more in interest than a 60-month term, and the car is likely to be worth less than the loan balance for the first years. A 72-month loan makes sense mainly for a reliable new car you plan to keep for a decade.

Can I pay off my auto loan early?

Yes, on almost every standard auto loan in the United States, and there is usually no prepayment penalty. Extra payments go to principal and shorten the loan. An extra $100 a month on the default loan finishes it nine months early and saves $880.34 in interest. Check your contract first for a prepayment clause, and confirm the lender applies extra payments to principal.

Does trading in my old car lower my payment?

Yes, if the trade-in is worth more than you still owe on it. A $5,000 trade-in with nothing owed cuts the amount financed by the full $5,000. If you still owe money on the trade-in, only the difference counts, and the calculator’s “still owed” field handles that. Get a second offer for your old car before you accept the dealer’s trade-in figure.

What credit score do I need for a car loan?

There is no single minimum, but the rate rises steeply as the score falls. Prime borrowers (661–780) pay about 6.15% on a new car, near-prime borrowers (601–660) about 9.71%, and subprime borrowers (501–600) about 13.52%. Below 500, used-car rates can pass 21%. Improving your score before you buy is often worth more than any negotiation at the dealership.

Disclaimer: This calculator is for general information only and is not financial advice. Loan terms, rates and tax rules vary by lender, state and credit profile. Check your loan agreement and current IRS rules before making a decision, and talk to a financial adviser for advice about your own situation.