Plan Your Auto Financing with Accurate Loan Estimates
How Is This Calculated?
Method
This calculator applies the standard amortized loan formula to determine monthly payments. It considers the vehicle price (plus sales tax), minus any down payment or trade-in value, along with the annual interest rate and loan term in months.
Formula
M = P × [r(1 + r)ⁿ] / [(1 + r)ⁿ – 1]
Where:
- M = Monthly Payment
- P = Principal (Amount Financed)
- r = Monthly Interest Rate (Annual Rate / 12 / 100)
- n = Loan Term (Months)
Steps
- Add sales tax to the vehicle price.
- Subtract down payment and trade-in value.
- Convert annual rate to a monthly rate.
- Use the formula to find the monthly payment.
- Multiply monthly payment by total months to get the full loan amount.
- Subtract principal to find total interest.
References:
- Standard amortization formula
- Compound interest principles
- Complies with TILA guidelines
Note: Estimates only. Actual figures depend on credit score, lender, and other fees.