How to use EarnIn’s auto loan calculator
Figuring out your auto loan payments doesn’t have to be a headache. EarnIn’s easy-to-use auto loan calculator helps you quickly estimate your monthly payment and see your loan payoff timeline.
Just follow these simple steps:
- Enter the vehicle price
Start by entering the price of the car you want to buy. This is the total cost of the vehicle, including any taxes and fees. - Select your financing term
Next, choose how many months you want your auto loan to last. A longer loan term means lower monthly payments, but you’ll pay more in interest over time. Most auto loans are somewhere between 24 and 84 months. Pick a loan term that fits your budget and planned payoff schedule. - Add the interest rate
Enter the annual interest rate for your loan. If you’ve already gotten quotes from lenders, use the rates they offered you one by one. Otherwise, input an estimated interest rate based on your credit score. Better credit generally means a lower rate. - Include your down payment
If you plan to make a down payment on the car, add that amount here. Making a down payment reduces the total amount you have to borrow, which means lower monthly installments and less interest - Get your results
Once you’ve entered all the info, click "Calculate" to get your results instantly. The calculator will show:- Your estimated monthly car payment
- The date the car is fully paid off
- The total interest paid over the life of the loan
- The total loan payments
You can also experiment with adjusting your down payment to see how it affects your other payments and your pay-off date.
What is an auto loan?
An auto loan lets you borrow money specifically for a car purchase. Most people don’t have the cash on hand to buy a car outright, so they take out a loan and pay it back over time rather than paying upfront.
Here’s how it works: When you get an auto loan, you receive a lump sum of money from a lender to pay for the car. In exchange, you agree to pay back the loan, plus interest, in monthly installments over a set period of time (usually 24 to 84 months). The lender holds the title to the car until you’ve fully repaid the loan.
The amount you can borrow and the interest rate you get depend on a few factors, including your credit score, income, and the price of the car. Generally, a higher credit score means you qualify for a lower interest rate, which saves you money over the life of the loan. That’s why it’s a good idea to check your credit and work on improving your score before applying for an auto loan.
If your credit has seen better days, you still have options for getting an auto loan with bad credit. But you may have to pay a higher interest rate or put down a bigger down payment.
What is an auto loan interest rate?
When you borrow money to buy a car, you don’t just pay back the amount you borrowed (the principal). You also have to pay interest, which is essentially the cost of borrowing money. The auto loan interest rate is a percentage of the total loan amount, and it’s tacked onto your monthly payments.
The interest rate you get depends on a few factors, like your credit score, the length of the loan, and the size of your down payment. But even a small difference in interest rates can have a big impact on how much you pay over the life of your loan, so be sure to shop around and weigh your options carefully.
Auto loan fees
Your principal and interest aren’t the only costs to think about when considering an auto loan. Here are some common additional fees to be aware of:
- Sales tax. As with most purchases, you need to pay sales tax. The amount varies by state and locality, but it’s typically a percentage of the car purchase price.
- Document fees. Lenders and dealerships may charge fees for preparing and filing the paperwork associated with your loan.
- Title and registration fees. These are the costs associated with registering your vehicle with the state and obtaining a title in your name. They’re usually based on the car’s value and can be hundreds of dollars.
- Destination fees. If you’re buying a new car, the manufacturer may charge a fee for delivering the vehicle to the dealership. This fee is often non-negotiable and can add several hundred dollars to the car purchase price.
Origination fee. Some lenders charge a fee for processing your loan application and setting up your account. This fee is usually a percentage of the total loan amount.
5 additional auto loan tips
Navigating the auto loan process can be challenging, but there are several things you can do to make it easier — and potentially save money. Here are some extra tips:
- Monitor your credit. Your credit score plays a big role in determining your auto loan rate. Check your credit report regularly and take steps to improve your score, like paying bills on time and keeping credit card balances low. Use a credit monitoring tool like EarnIn’s, which lets you keep a close eye on your score for free3.
- Pay off your loan early. If possible, make extra payments or larger monthly payments to pay off your loan faster. This saves you money on interest payments. Just make sure your lender doesn’t charge prepayment penalties.
- Make a substantial down payment. Putting more money down upfront reduces the amount you need to borrow and can lower your monthly payments.
- Set up automatic payments. Enrolling in auto-pay helps you avoid missed or late payments, which hurt your credit score.
- Auto refinance. If interest rates fall or your credit improves, consider refinancing your loan to get a lower rate.
Buying versus leasing a car
Leasing is like a long-term rental. You make monthly payments to drive the car for a set period, typically 2–3 years.
Leasing can be a good option if you prioritize lower monthly payments or just want to drive the latest model of your favorite car. But for most people, buying is the better choice. Here’s why:
- Ownership. When you buy a car, you own it once you’ve paid off the loan. With leasing, you never own the car. That means your investment isn’t going anywhere.
- Freedom to sell. As a car owner, you can sell whenever you want. With a lease, you’re committed to the full term, and ending it early can be costly.
- No mileage limits. Leases often have annual mileage restrictions, and exceeding them means paying extra fees.