Auto Loan Calculator
Calculate your monthly car payment and see how much interest you'll pay over the life of your auto loan. Compare different loan terms and down payment options.
Auto Loan Guide
Current Auto Loan Rates
Average auto loan rates vary by credit score and loan term:
- Excellent Credit (750+): 4-6% APR
- Good Credit (700-749): 6-8% APR
- Fair Credit (650-699): 8-12% APR
- Poor Credit (Below 650): 12-20% APR
New cars typically have lower rates than used cars.
How Much Car Can You Afford?
Financial experts recommend the 20/4/10 rule:
- 20% Down Payment: Reduces loan amount and monthly payment
- 4-Year Loan: Keeps total interest costs reasonable
- 10% of Income: Monthly payment under 10% of gross income
Remember to budget for insurance, gas, and maintenance too.
New vs Used Car Financing
| Factor | New Car | Used Car |
|---|---|---|
| Interest Rates | Lower (4-7%) | Higher (5-10%) |
| Loan Terms | Up to 84 months | Up to 72 months |
| Down Payment | 10-20% | 10-20% |
| Depreciation | High (20% year 1) | Lower |
Tips to Get Better Rates
- Improve Credit Score: Pay bills on time, reduce debt
- Shop Around: Compare banks, credit unions, and dealers
- Get Pre-approved: Know your rate before shopping
- Larger Down Payment: Reduces risk for lenders
- Shorter Term: Lower rates for shorter loans
- Consider a Co-signer: If you have limited credit
Frequently Asked Questions
Should I finance through the dealer or my bank?
Compare both options. Dealers may offer promotional rates, but banks and credit unions often have competitive rates too. Get pre-approved before shopping to have negotiating power.
How long should my auto loan be?
While longer loans have lower monthly payments, you'll pay more interest overall. A 4-5 year loan balances affordable payments with reasonable interest costs. Avoid 7-year loans if possible.
Can I pay off my auto loan early?
Most auto loans allow early payoff without penalties. Check your loan terms. Paying extra toward principal can save significant interest over the loan term.
What's gap insurance and do I need it?
Gap insurance covers the difference between what you owe and the car's value if it's totaled. It's recommended if you put down less than 20% or finance for more than 60 months.