Question 1

How is a car loan monthly payment calculated?

Accepted Answer

The standard amortization formula is M = P × r × (1+r)^n / ((1+r)^n − 1), where P is the loan amount (price minus down payment and trade-in, plus sales tax), r is the monthly interest rate (APR / 12 / 100), and n is the loan term in months. This calculator applies it automatically.

Question 2

Does trade-in value lower my monthly payment?

Accepted Answer

Yes. Your trade-in reduces the amount you need to finance, which lowers both the loan principal and your monthly payment. Enter your trade-in value alongside the down payment.

Question 3

What is a good APR for a car loan?

Accepted Answer

For buyers with excellent credit, new-car APRs often range from about 4% to 6%, while used-car loans are typically 1–2 points higher. Rates vary by lender, credit score, loan term and whether the car is new or used.

Question 4

Is my financial information private?

Accepted Answer

Yes. Every calculation runs entirely in your browser. No loan amount, income or payment data is ever sent to a server.