An auto loan calculator quickly reveals how much you can expect to pay per month when financing a car. It’s easier to compare car loan options when you have an understanding of the monthly payments that come with your interest rate and desired term length.

We researched the industry’s top car loan companies to figure out which ones provide great rates and satisfactory terms. To help you choose the right loan offer for you, we’ll break down how to use auto loan calculators and explain what factors could affect your monthly payments.

What Is An Auto Loan Calculator?

Auto loan calculators are tools that estimate your potential monthly payments when you’re looking to finance a vehicle. They can also help you determine how much you’ll likely pay for your new or used car overall.

While auto loan calculators vary depending on the source, the following list includes the pieces of information you may be asked to enter.

  • Loan amount
  • Vehicle price
  • Down payment amount
  • Value of your trade-in vehicle
  • Credit score
  • Desired loan term
  • Desired interest rate
  • Sales tax and fees

From there, an auto loan calculator can help you understand which lenders are giving you excellent rates and which ones might be worth avoiding.

How Does An Auto Loan Calculator Work?

Below, we’ll explain how to get estimates of your monthly car payment amount by using an auto loan calculator.

1. Find An Online Auto Loan Calculator

It’s critical that you find a car loan calculator offered through a reputable website. The key reasons to use an auto loan calculator are to determine fair car financing rates and to figure out how large of a loan you can afford. These are important pieces of information, so be sure to get answers from an accurate source.

2. Enter Basic Details About The Car Loan

A legitimate auto loan calculator will ask you certain questions before offering an estimate. Below, we’ll look at a few of the most common:

  • Price of the car: You’ll need to know the car’s purchase price before filling out a car loan calculator. Deduct any potential savings you’ll receive through negotiations or manufacturer incentives.
  • Down payment information: The more money you cover up front, the less you’ll pay in interest later. It can be smart to put the trade-in value of your old vehicle toward the down payment on your next car.
  • Credit score: Your credit score is essential to determining your annual percentage rate (APR), which consists of your interest rate plus any fees. You may be able to check your credit score for free through your bank, credit card issuer, or credit union. If not, you can get it from one of the three major credit bureaus for a fee.
  • Preferred term length: An auto loan calculator can show you how different term lengths affect your payments. In general, borrowers with long terms have lower monthly car loan payments but pay more interest over time.

3. Consider The Auto Loan Calculator’s Results

Once you submit the details outlined above, the calculator will create an estimate of your monthly payments. It’s smart to test out a few term lengths, as your interest rate could be much lower if you choose a shorter loan term.

Your loan payments are made of two parts: the principal and the interest. The principal is the amount you borrowed for the car, and the interest is the amount you’ll be charged for using the loan.

Avoid any result that leads to an “upside-down” loan, which happens when the loan balance is higher than the value of your vehicle. Car purchases that lead to upside-down loans are commonly associated with dealerships, so be careful if you decide to get financing from one.

4. Consider Factors Left Out Of Loan Calculators

While auto loan calculators offer relatively accurate estimates, they typically exclude some important information. Consider the following pieces in addition to the estimates you find through an online loan payment calculator:

  • Lender fees: Your lender may charge an origination fee for processing your auto loan. Borrowers also sometimes get hit with application fees from certain providers.
  • State and local taxes: Expect to pay any applicable fees or sales taxes to your state or municipality when you buy a vehicle. Very few auto loan calculators will factor these costs into their estimates.
  • Prepayment penalties: If you want to refinance your existing car loan, you may be charged a prepayment penalty for paying your loan off ahead of schedule. This fee is meant to make up for the interest the lender would have collected during the rest of your loan term.
  • Manufacturer’s rebates: If you’re buying a new vehicle, there’s a chance you’ll be offered cash incentives from the automaker.

5. Reach Out To Auto Lenders

Now that you understand how much you might spend each month for the life of the loan, it’s time to consider car loan providers. Compare lenders and their loan offers to figure out which vehicle financing option is most appealing to you.

What Are Typical Auto Loan Rates?

Learning what interest rates other borrowers get when financing cars can give you an idea of how your credit history could affect your total loan costs. Below is data from Experian’s Q4 2021 State of the Automotive Finance Market report that reveals the average interest rates lenders give people in different credit brackets:

Credit Score

Average Interest Rate

for New Cars

Average Interest Rate

for Used Cars

781–850

2.47 percent

3.61 percent

661–780

3.51 percent

5.38 percent

601–660

6.07 percent

9.8 percent

501–600

9.41 percent

15.96 percent

300–500

12.53 percent

19.87 percent

Those with poor credit scores almost always pay the highest rates for car financing. You may also notice that interest rates are considerably higher for those seeking used vehicles than for those looking at new cars.

Top Choices For Auto Loan Providers

We recommend reaching out to Auto Credit Express and LightStream if you’re shopping for auto financing. While they serve different types of borrowers, both companies offer quality car financing and relatively reasonable rates.

Auto Credit Express: Best For Bad Credit

Instead of offering car loans directly, Auto Credit Express connects car buyers with auto lenders that fit their needs. People who want bad credit car loans may be able to get loan offers through Auto Credit Express, as the company doesn’t have a minimum credit score requirement.

Auto Credit Express helps drivers compare disclosures such as interest rates and term lengths to determine which car financing providers match their requirements. Depending on your credit history and your desired vehicle, you could find compelling choices from Auto Credit Express regardless of whether you want to buy a car or refinance a car loan.

LightStream: Best For Good Credit

If you’ve got a strong credit history, you may be eligible for an auto loan from LightStream. The company generally rejects applicants with poor credit scores and those with limited credit history, so make sure it’s the right option for you.

LightStream can be a cost-effective option for financing a car. The lender offers plenty of incentives to borrowers it accepts, such as a lack of origination fees and prepayment penalties. LightStream customers can also save money by enrolling in AutoPay, which reduces a borrower’s rate by 0.5 percentage points.

Frequently Asked Questions

How We Rate Loan Providers

Our review process aims to deliver consistent and unbiased assessments of auto loan providers. While there are multiple qualities that make a loan company successful, our review team focuses on those we believe are the most important for consumers:

  • Rates: Auto loan companies with high loan amounts and low APRs are more likely to meet customer needs.
  • Reputation: Our review team explored ratings from experts and each lender’s number of years in business when giving this score.
  • Availability: Companies that cover a variety of circumstances scored best in this category.
  • Customer Experience: This rating is based on transparency and consumer satisfaction ratings. We also took into account the helpfulness of each loan provider’s team based on our shopper analysis.

*Data accurate at time of publication.