Car Loan Calculator

The sticker price is only the first number. A car loan adds tax, registration and fees on the way in, takes away your down payment and trade-in, and then charges interest on whatever is left for years. By the end, the car has cost noticeably more than its price, and the monthly payment you are quoted hides that. This calculator builds the whole loan from the parts and shows the payment, the interest and the total.

Building the loan amount

Start with the vehicle price and add the tax or registration percentage and any fees you plan to finance. Subtract the down payment and the value of your trade-in. What remains is the loan. A switch lets you choose whether tax is charged on the full price or on the price minus the trade-in, which is how some places treat it. If your down payment and trade-in cover everything, the page says no loan is needed.

A worked example

The default car costs 12,00,000, with 2,00,000 down, tax of 10% and 15,000 of fees. Price plus tax and fees is 13,35,000, so the loan is 11,35,000. At 9% over 60 months the payment is 23,560.73, the interest is 2,78,644, and the car costs 16,13,644 in total. The balance falls to 9,46,783 after year one, 7,40,910 after year two and 5,15,724 after year three. A second example in dollars: a 28,000 car with a 4,000 down payment, a 5,000 trade-in, 7% tax charged on the price minus the trade-in and 600 of fees gives a price with tax and fees of 30,210, a loan of 21,210 and a payment of 415.00.

The 20/4/10 guideline

If you enter your monthly income and the monthly cost of insurance and fuel, the page checks the 20/4/10 guideline: put at least 20 percent down, borrow for no more than four years, and keep total vehicle costs under 10 percent of gross income. It is a rule of thumb from personal-finance writing, not a lending requirement. In the default example the car’s payment and running costs take 21.7 percent of income and none of the three conditions is met, which the note says plainly.

Working backwards from a budget

Enter the payment you can afford and the page works out the largest loan that payment can service at your rate and term, then adds your down payment and trade-in, subtracts fees and removes the tax to give the most expensive car. In the dollar sample, 450 a month allows a car of about 29,672. It is a ceiling, not a target; many people prefer to stay well below it so that insurance, fuel and repairs fit.

Edge cases

A zero interest rate is accepted and splits the loan evenly over the months. The term can be up to 120 months. A negative balance cannot occur: if the down payment and trade-in exceed the cost, the loan is zero. Because fees are financed, they appear in the interest total as well, so compare with paying them up front.

Limits

The page does not include insurance, add-ons, road tax that renews each year or changes in a floating rate. The quoted payment ignores any processing fee charged separately by the lender, and dealers sometimes bundle products into the price, so ask for a breakdown.

Related tools

• Loan Calculator works for any loan, with a month-by-month schedule.
• Bike Loan Calculator builds the on-road price of a two-wheeler in the same way.
• Lease Calculator shows the lease alternative to buying with a loan.
• DTI Calculator shows how the payment affects your borrowing room.