Car Loan Calculator

Car Loan Calculator to calculate your monthly or biweekly car loan payment and export the car loan amortization schedule to excel. Auto loan calculator with trade in and sales tax has options for a down payment, bi-weekly payment options, and shows monthly and yearly amortization. The car loan amortization schedule excel with extra payments is exportable to excel and pdf, and you can view the amortization chart online. The only required fields are vehicle price, loan terms, and interest rate, all other fields are optional, and you can simply leave them as 0. You have the option to include sales tax and other fees in your loan.

What does financing a car mean?

Financing a car means a person wants to buy a car but does not have the cash, therefore he applies for a loan to finance the purchase of the car. Some borrowers may have some savings that they can use as a down payment and hence lower the loan amount. The lender will charge a fixed interest rate, and the borrower will repay the loan in monthly payments which consist of principal and interest. The car loan is secured by the vehicle that the borrower is purchasing, which means the lender has the right to take away the car if the borrower fails to make payments.

How do car loans work?

Three things determine the monthly payments and the total costs of a car loan, the loan size, the interest rate, and the terms. When shopping for a car, always look for the interest rate that you are getting from a lender. The interest rate is used to calculate how much interest you will be paying. A car loan with a longer-term such as a 5-year term will come with lower monthly payments than a 3-year term. However, a lower monthly payment does not necessarily mean a borrower is getting a deal. He would be paying more in interest payments since he has to make monthly payments for 5 years instead of 3 years.

Pros and cons of financing a car

There are benefits and drawbacks of getting a car loan to finance the purchase of a new or used car. Pros of financing a car

• Afford to buy a car - without financing, you may not be able to afford to buy a car.
• Cheaper than leasing - with leasing, you still pay a monthly payment, but you don't own the car. Leasing is like renting where the buyers do not build equity on their car. They have to return the car to the dealer after the payment is completed. With financing, you own the car after the term is over.
• Improve credit score - having a loan balance improves your credit score. However, if you default on the loan or make late payments, it would destroy your credit score.
• Buy a car you like - if the vehicle that you like to buy is out of your budget, financing gives you the option to buy a car that you like.
• Lower interest rate - if you have a good credit score, the interest that you are getting will be competitive. This allows you to leverage the bank without putting up all your money upfront.

Cons of financing a car

• Monthly payments - you will have a monthly payment to make. Depending on the term, you may have to make payments for 3 to 5 years. Sometimes even longer. Missing payments could ruin your credit score and the car.
• Interest payments - the bank or lender doesn't give you the money for free. You need to repay the loan plus interest. If the interest rate is high, then you may end up paying thousands in interest payments.
• You may lose the car - if you failed to make payments or default on the car loan, the lender will take away your car.
• Down payment - you may need a sizable down payment. Lenders are taking more risks when a borrower doesn't put a down payment. Therefore, they would either reject your application or charge a higher interest rate if you don't have a down payment.
• Interest may be high - the interest rate could be high, especially for borrowers with a low to medium credit score. The best interest rates are given to the ones with good credit scores.

How to get the best interest rate on a car loan?

Getting a deal on a car is only part of the equation, the other part is to get the best interest on your car loan. Following are some tips and how you can get the best interest rate on a car loan.

• Compare lenders - It is never a good idea to go with the first lender where you get a quote. To get the best interest rate on a car loan, you first need to shop around and compare the rates from different lenders. There might be closing costs and other fees that you need to factor in to get the best buck for your budget.
  
  
• Improve credit score - lenders not only want to see that you have the ability to repay the loan, but they also want to see if you are responsible for your other debt or payments. A credit score is what lenders used to judge what kind of interest rate you will be getting. The higher your credit score is, the better rate you will get. To help improve your credit score, always pay your debt on time. Set up auto-pay so that you never miss a payment or make late payments. For borrowers with good credit standing, a miss or late payment could knock a few dozen points off their credit scores.
  
  
• Save a down payment - the larger the down payment, the smaller the loan size. Since the loan amount is one of the three factors that affect the total costs, the larger the loan size, the more interest payments that you end up making. It is recommended that you save a down payment for your car loan.
  
  
• Shorten the loan term - another option is to shorten the loan term from a 6-year term to a 5-year term, or a 5-year term to a 3-year term. With a shorter term, a borrower would save a lot of money on interest payments. However, the monthly car payment is larger with a shorter term, make sure that you can afford it before choosing a shorter-term otherwise you are putting your new car at risk.
  
  

How to calculate car payment?

There are two parts to monthly car payments which are made up of principal and interest payments. Since a car loan is a fixed-rate loan, the monthly payments stay the same throughout the loan. As we stated above, the car payment is determined by the loan amount, loan terms, and interest rate, and the formula for calculating car payment is given below. Monthly Car Payment = (P x I) / (1 - 1 / (1 + I)^ n)), where P = Loan Amount I = Monthly interest rate in decimal, or I/100/12 n = The term of the car loan in months Car Payment Example Let's calculate the monthly payment for a car loan of $30,000 with an interest rate of 5.65% and a 5-year term. P = $30,000 I = 5.5/100/12 = 0.00458 (interest rate divide by 100 to get the decimal, and then divide by 12 to get the monthly interest rate) n = 5 x 12 = 60 (5 years equals 60 months) Plugin the above monthly payment formula, and we get Monthly Car Payment = (P x I) / (1 - 1 / (1 + I)^ n)) = (30,000 x 5.5/100/12) / (1 - 1 / (1 + 5.5/100/12)^ 60)) = (30,000 x 0.00458) / (1 - 1/ (1+0.00458) ^ 60)) = 137.5/(1- 1/(1.00458)^60)) = 137.5/(1-1/1.3154) = 137.5/(1-0.76) = 137.5/(0.24) = 573 Therefore, the monthly payment for the car loan is $573.

Interest rate vs APR car loan

The interest rate of a car loan is based on the amount of money that you borrow and the interest payments that you make. It does not include closing fees and other costs associated with getting the car loan.

What is APR on a car loan?

The annual percentage rate or APR of a car loan is the annual costs of the loan expressed as a percentage. The APR includes all the fees and costs on top of the interest rates that you need to pay for the loan. Therefore, the APR is usually higher than the interest rate unless other fees and closing costs are waived for the car loan. In other words, when there are no additional financing costs than the interest payment, the interest rate, and APR would be equal.

How is interest calculated on a car loan?

Most auto loans are fixed-rate with simple interests, which means the monthly payments remain the same throughout the loan while the interest payment decreases. There are two parts of the car monthly payment, the principal and the interest. Interest is computed based on the balance of the loan. As the balance of the car loan decreases, so will the interest payment. On the other hand, the principal payment increases as time goes by which is a good thing because it reduces the loan balance. If borrowers start to make extra payments toward the principal, it would reduce the loan balance and hence lower the overall costs of interest payments. Depending on the loan amount and the extra payment, borrowers may pay off the loan a few months or even a year earlier. For example, on a $30,000 car loan with a 5% interest rate and a 5-year term, the following is how much it would cost the borrower.

• Monthly Payment - $566.14, borrowers pay this fixed payment each month until the loan is paid off.
• Interest Payment - $125, the first month of interest payment. It is recomputed and decreased every month until the balance reaches $0.
• Principal Payment - $441.14, the first month of principal payment. The principal payment is increased every month until the end of the loan term.

Our car loan calculator with an amortization schedule will show you all the details when you enter the loan amount, interest rate, and terms.

Car Loan Amortization Schedule Excel

That car loan calculator has a printable car loan amortization schedule with extra payments excel that you can print, share or save as a pdf. The auto loan calculator with amortization chart is available on the Play Store. You can install the auto loan calculator app for free if you have an Android phone or device.

Biweekly Auto Loan Calculator

If you want to pay off your loan faster, you can consider using extra payments or making biweekly payments. Simply select the bi-weekly payment option to use the tool as a biweekly auto loan calculator. Biweekly payment allows you to make one extra payment each year than the monthly payment, and hence you will be able to pay off your auto loan faster and save some money on interest. Additionally, you can choose to pay a one time extra payment or recurring payments to reduce your principal and pay off your loan quicker. Following are the auto loan terms Vehicle Price - the purchase price of the vehicle or car value. Down Payment - how much are you putting down as your initial payment for your car. Loan Payment - how much loan are you applying for to finance the car. Loan Terms - how many years are you going to pay off your car loan. The most common auto loan terms are 2-7 years. Interest Rate - the annual interest rate for your auto loan. The interest rate may vary depending on your credit score. A good credit score will get you a lower interest rate and save a lot of money in interest payments. Payment Frequency - how often are you making your payments. The default is the monthly payment. You can choose a biweekly payment to pay off your loan faster. Trade in Value - do you have an old car that you can trade in with? This will reduce your payment for your new card. Other Fees - list any other costs and fees associated with buying the car. First Payment Date - if today is not the date of your first payment, you can choose any other date as the date that you will start to make payments. Amortization Schedule - you have the option to show your monthly amortization schedule or group them by year. Include all fees into the loan - check this checkbox if you wish to include all other costs and fees into the loan. Extra Payment - you can choose to make extra payments for your car loan.

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