Car Loan Calculator — Know the Real Cost Before You Sign
By MoneyDecoded · Last updated June 2026 · 2-minute tool
Enter your car price, down payment, and loan terms to instantly see your monthly payment, total interest, and true borrowing cost. Compare different terms side by side. No sign-up required.
🚗 Car Loan Rates (2026)
7.1%
Avg APR — new car, good credit
11.3%
Avg APR — used car, good credit
$48,000
Avg new car price (2026)
Sources: Federal Reserve, Experian, Edmunds. Rates vary by credit score, lender, and vehicle. Always get pre-approved before visiting a dealer.
Car Loan Calculator
Calculate Your Monthly Payment
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Monthly Payment
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Fixed for loan term
Total Interest
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Cost of borrowing
Total Repaid
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Principal + interest
Loan Amount
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After down + trade-in
Down Payment
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% of vehicle price
Payoff Date
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Estimated
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Interest
Loan Principal
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Total Interest
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Down + Trade-In
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Term Comparison
Same Loan, Different Terms — Side by Side
All figures use the same loan amount and APR entered above. The highlighted row is your selected term.
Why It Matters
The Real Cost of a Car Loan
The sticker price is not what you pay for a car — the total cost includes interest, and that interest adds up quickly. A $30,000 car financed at 7.1% APR for 5 years costs $5,790 in total interest on top of the purchase price. Extend that to 7 years and the interest climbs to $8,180. The monthly payment drops, but you pay more overall and remain underwater on the loan longer as the car depreciates.
$48K
Avg new car price (2026)
7.1%
Avg APR — new car, good credit
68 mo
Avg loan term (2026)
20%
Recommended down payment
Smart Strategies
How to Borrow Less for Your Car
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Get Pre-Approved First
A pre-approval from a credit union or bank before visiting the dealer gives you a rate to beat. Credit unions typically offer 0.5–1.5% lower rates than dealers or banks for the same credit profile.
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Put 20% Down on New Cars
New cars depreciate 15–20% in the first year. A 20% down payment keeps you from going underwater immediately. Less down means you could owe more than the car is worth for years.
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Keep the Term Under 60 Months
Every month you extend the loan, the car is worth less but you still owe the same. 84-month loans are common but risky — you may need to replace the car before it's paid off.
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Negotiate the Price First, Financing Second
Agree on the purchase price before discussing financing. Dealers often blend the two to obscure true cost. Knowing your total price before the finance office visit removes the confusion.
Common Questions
Car Loan FAQ
What is a good APR for a car loan in 2026? ▾
For new cars, borrowers with excellent credit (750+) typically qualify for rates below 5–6% APR. Average credit (670–739) usually sees 7–10%. Used car loans run 1–3 percentage points higher. Credit unions generally offer the lowest rates — worth checking before you go to a dealer.
How much should I put down on a car? ▾
20% for a new car, 10% for a used car is the common recommendation. New cars depreciate fast — a 20% down payment helps ensure you don't owe more than the car is worth in the first couple of years. Less down means higher monthly payments and longer underwater exposure.
What loan term should I choose? ▾
Shorter terms (36–48 months) cost less in total interest but have higher monthly payments. Longer terms (72–84 months) lower your payment but significantly increase total cost and keep you underwater on the loan longer. Most advisors recommend staying at or below 60 months.
Should I finance through the dealer or get my own loan? ▾
Get pre-approved at a credit union or bank before visiting the dealer. This gives you a concrete rate to compare against the dealer's offer. Promotional dealer rates (0% APR) can be genuinely competitive, but only for buyers with excellent credit — and often with a higher vehicle price built in.
What's the difference between the loan payoff amount and total cost of ownership? ▾
The loan payoff amount is what you repay to the lender: principal plus interest. Total cost of ownership also includes insurance, fuel, maintenance, registration fees, and depreciation. A rough estimate: add $1,500–$3,000/year for insurance, $1,000–$2,000 for maintenance, and $1,500–$2,500 for fuel to get a fuller picture.
Know Your Real Numbers Before You Buy
Run different scenarios above — change the down payment, term, or APR — and see exactly how each decision affects your total cost.
How Car Loan Interest Works
Car loans are simple interest loans that amortize over the term — each monthly payment covers that month's interest first, with the remainder reducing your principal balance. Because the balance is highest at the start of the loan, you pay the most interest in the early months. This is why paying a little extra toward the principal early in the loan saves more than paying extra later.
The Risk of Long Loan Terms
A new car typically loses 15–20% of its value in the first year and around 50% over five years. If you finance 80% of a $35,000 car with a 7-year loan, you may still owe more than the car is worth three or four years in. This creates a problem if you need to sell, trade in, or if the car is totaled — you'd owe more to the lender than you'd receive. Keeping the loan term shorter than the car's useful life reduces this risk significantly.
New vs. Used Car Financing
Used car loan rates are typically higher than new car rates — by 1 to 3 percentage points for the same borrower. This partially offsets the lower purchase price. A $20,000 used car at 10% APR for 5 years costs $5,496 in interest. A $30,000 new car at 7% APR for 5 years costs $5,594. The monthly payment is higher on the new car, but the total interest is nearly identical. The right choice depends on the specific vehicles, not just the category.