How is a car payment calculated?

With the amortization formula: payment = P × r ÷ (1 − (1 + r)^−n), using the amount borrowed, the monthly interest rate and the number of months.

Is a 72-month car loan a bad idea?

It lowers the payment but increases total interest, and you may owe more than the car is worth for longer. Compare total cost before choosing.

How much should I put down on a car?

There's no fixed rule. A larger down payment reduces interest and the risk of owing more than the car is worth.

Does the APR include fees?

APR is meant to reflect the yearly cost of credit including certain fees, which makes it better than the interest rate alone for comparing loans.

Can I pay off a car loan early?

Usually, but check for prepayment penalties in the contract.

Car Loan Calculator: Monthly Payment (2026) / CarO

Written by Muneeb Rana · Last updated 21 October 2026

Quick answer: A car loan calculator uses the amortization formula: payment = P × r ÷ (1 − (1 + r)^−n), where P is the amount borrowed, r the monthly rate (APR ÷ 12) and n the number of months. Borrowing $25,000 at 7% APR for 60 months gives a payment of about $495 and roughly $4,700 in total interest.

TL;DR

Enter price, down payment, trade-in, APR and term.
Longer terms lower the payment but raise total interest.
Compare APRs from several lenders before visiting the dealer.

This car loan calculator shows your monthly payment, total interest and a full amortization schedule. The CFPB recommends shopping around for financing and focusing on the total cost of the loan, not just the monthly payment, which is exactly what this tool shows.

How to use the car loan calculator

Enter the vehicle price, down payment and any trade-in value.
Add sales tax and fees if they're being financed.
Enter the APR and the loan term in months.
Read the monthly payment, total interest and total paid.
Open the schedule to see how much of each payment goes to interest.

How the car loan calculator works

P = price + financed_fees + tax - down_payment - trade_in
r = APR / 12 / 100 ; n = term_months
payment = P * r / (1 - (1 + r)^(-n))      (if r = 0: payment = P / n)
total_interest = payment * n - P

Worked example

$28,000 car, $3,000 down, borrowing $25,000 at 7% APR for 60 months: r = 0.005833, payment ≈ $495, total paid ≈ $29,700, total interest ≈ $4,700. Over 72 months the payment falls to about $426, but interest rises to about $5,700.

Lower the total cost

A bigger down payment, a shorter term and a better APR all reduce interest. Get pre-approved by a bank or credit union so you can compare the dealer's offer. The CFPB's auto loans hub explains add-ons and how to avoid paying for extras you don't want.

Budget for the whole car

The payment is only part of it. Add fuel, insurance, maintenance and depreciation with the cost of car ownership calculator and maintenance cost calculator, or compare with leasing in the lease vs buy calculator.

Track payments and running costs

Log loan payments alongside fuel and services in CarO's car expense tracker to see your true monthly cost. Check value loss with the depreciation calculator.

Download CarO free on the App Store or Google Play. Free with ads; optional in-app purchases.

Sources

CFPB: Auto loans: www.consumerfinance.gov (accessed 21 October 2026)
CFPB: What is the difference between leasing and buying a car?: www.consumerfinance.gov (accessed 21 October 2026)
AAA: Your Driving Costs 2025 fact sheet: newsroom.aaa.com (accessed 21 October 2026)

Disclaimer: CarO and this website give general car-care information, not professional advice. Maintenance intervals and specifications vary by vehicle, so always follow your owner's manual and a qualified mechanic. Mileage and cost figures are estimates; check local tax rules before using any log for deductions.

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