Estimate your monthly auto loan payment instantly
When you finance a car purchase, the lender provides the funds to buy the vehicle and you repay the loan in fixed monthly installments over a set term. The loan amount is the car price minus your down payment. Interest is calculated on the remaining balance each month, so early payments go mostly toward interest while later payments reduce more principal.
Your monthly payment depends on four factors: the loan amount (car price minus down payment), the interest rate (determined by your credit score and the lender), the loan term (longer terms mean lower payments but more total interest), and any additional fees or taxes rolled into the loan.
Shop around for pre-approved loans before visiting the dealership. Aim for a 20% down payment on new cars and 10% on used cars. Choose the shortest loan term you can afford — a 48-month loan will save you thousands in interest compared to a 72-month loan. Always check for prepayment penalties before signing.