Or, if you want to do the math yourself, here’s how:
How Are Auto Loans Calculated?
The amount of money you borrow is called the principal. To calculate your monthly auto loan payment, you divide the total interest you will pay on the loan by the number of months in the loan term. This number, plus the principal, is the monthly auto loan payment.
For example: You’re looking to buy a car for $20,000 with a five-year loan and you have a trade-in worth $2000. Your interest rate is six percent. You’ll need to make a down payment of at least ten percent, which in this case is $2000. So, that means you will pay your car loan, $18,000, for 5 years. At six percent interest, the auto loan interest rate formula, over five years you’ll pay $1080 in interest for a total monthly payment of just under $400 ($390.80 to be exact).
Used vs New Car Calculator
If you’re not sure whether used or new is the way to go, a used vs new car calculator can help. This type of calculator provides several comparison points including interest rates, loan terms, and total cost.
To illustrate how this calculator works: You’ve narrowed it down to two cars, used at $20,000 and new at $30,000. Using the used vs new car calculator, you can determine what kind of loan terms you’ll qualify for on each car. You may be able to get a used auto loan for five years with no money down at a lower interest rate than for the new car. In this scenario, the used car loan calculator will show that the used car is a better deal.
If you have already determined whether used or new is the way to go and want to focus solely on an auto loan, then a 5 year auto loan calculator can be used, or depending on the situation, a 7 year auto loan calculator can be used. This type of calculator helps you understand your monthly payments based on different factors such as the asking price of the vehicle, the loan amount, interest rate, and other fees. With this tool you can see how long it will take to pay off your loan and what the total cost of your purchase would be. A 5 year car finance calculator will break down the payments with all the variables, into the monthly payment amount or even an auto loan, biweekly payment calculator option exists for specific loans.
The 5 year car loan calculator is also beneficial for used auto loans since you may qualify for a longer repayment term than with a new car loan. The used car finance calculator can help you compare loan terms and monthly payments in order to determine which is the best option for you. With this tool, you’ll be able to make informed decisions about your financial future and know that you have the right auto loan for your situation.
Auto Loan Basics: Calculate Your Own Auto Loan Payment
The auto loan interest rate formula requires that you take the vehicle price and multiply it by the interest rate. This will give you the amount of interest that will accrue on the loan. If you do not know the interest rate, don’t worry! You can still estimate your monthly payment by using the average interest rate for used cars, which is currently between 4-8%, depending on if it’s a new car or used car and other factors like your financial situation (the main factor is your credit score and credit history). The total interest you will pay on the loan can be found by multiplying the vehicle price by the length of the loan in months, and then multiplying that number by the interest rate.
Next, take the vehicle price and subtract any money you put down as a down payment. If you got a cash rebate or multiple cash rebates, this will also lower your loan amount and monthly auto loan payments.
Now that you know how auto loans are calculated, you can use an online auto loan calculator to estimate your monthly payment. Remember to include any additional fees, such as sales tax, in your calculation. By using an auto loan calculator, you can find out how much car you can afford and filter your search based on the total loan cost.
Saving Money On Car Loans
You can save money on car loans by making a larger down payment, which will reduce the amount of interest you will pay. Any trade-in value with your car purchase will also lower the amount of your loan, and therefore the interest you will pay.
You can also refinance your auto loan to get a lower interest rate, which will lower your monthly payment and the total interest you pay on the loan. Keep in mind that you will need to own your car outright or have equity in it to be able to refinance.
Making extra payments on your auto loan can also help you pay off the loan sooner and save money on interest. You can make bi-weekly payments instead of monthly payments, or make additional principal-only payments on top of your regular monthly payment.
Your Next Vehicle Purchase at Wii Auto Sales
If you are in the market for a great deal on a used car, truck, or SUV, come to Wii Auto Sales. We have a large selection of quality vehicles to choose from at great prices. We offer financing for all types of credit, and we are here to help you get into the car you need and get trade-in value on your current car. Our auto amortization calculator, extra payments options can be easier mapped out to prepare you for your choice of vehicle.
