⚑ An estimate, not advice
This tool provides estimates for educational purposes only and is not financial, tax or legal advice. Consult a licensed professional before making decisions.
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Estimated monthly payment
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$0Amount financed
$0Total interest
$0Total cost of loan
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Compare today's auto loan & refinance rates
Rates vary widely by lender and credit score. Comparing several offers before you sign can save hundreds over the life of a car loan. Prefer an interest-free route? Read about halal vehicle finance below.
Halal finance options →How the auto loan calculator works
First we work out the amount financed — the loan principal:
P = price + price × tax ÷ 100 − down payment − trade-in
Sales tax is applied to the vehicle price, then your down payment and trade-in value are subtracted. The result is floored at zero — if your cash and trade-in cover everything, there is nothing left to finance.
Your monthly payment then uses the standard amortization formula:
M = P · [ r(1+r)n ] / [ (1+r)n − 1 ]
where r is the monthly interest rate (annual rate ÷ 12) and n is the term in months. If the rate is zero, the payment is simply P ÷ n. Total interest is M × n − P, and total loan cost is M × n — everything you pay over the full term.
Frequently asked questions
How is a monthly car payment calculated?
It uses M = P·[r(1+r)ⁿ]/[(1+r)ⁿ−1], where P is the amount financed, r the monthly rate (annual ÷ 12) and n the term in months. At a zero rate the payment is simply P ÷ n.
What is the amount financed?
It's the loan principal: vehicle price plus any sales tax, minus your down payment and trade-in value. It can never go below zero.
Does a longer car loan term lower my payment?
Yes — more months means a smaller monthly payment, but you pay interest for longer, so total interest and total cost both rise. A shorter term costs more per month but less overall.
How can I reduce the total interest on a car loan?
A bigger down payment or trade-in, a lower rate, or a shorter term all cut total interest. For a riba-free option, look at an Islamic murabaha or ijara vehicle-finance arrangement.
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Sources & further reading
Standard amortization formula; U.S. Consumer Financial Protection Bureau (consumerfinance.gov) for auto-loan guidance. Read our full disclaimer →