Car Loan Calculator

Car loan payments use the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n-1], where P is principal (loan amount), r is monthly interest rate, and n is number of payments. For a $25,000 loan at 6% APR for 60 months: M = $25,000 × [0.005(1.005)^60] / [(1.005)^60-1] = $483.32/month.

Good car loan rates in 2024 depend on credit score and whether the car is new or used. Excellent credit (750+): 4.5-6% for new, 6-8% for used. Good credit (700-749): 6-8% for new, 8-10% for used. Average credit (650-699): 8-12% for new, 10-15% for used. Always shop around—rates can vary by 2-3% between lenders.

Longer terms mean lower monthly payments but significantly more interest paid. A $25,000 loan at 6%: 48 months = $587/month, $3,180 total interest. 60 months = $483/month, $4,000 total interest. 72 months = $414/month, $4,830 total interest. Choose the shortest term you can afford to save money.

A 20% down payment is ideal because it: 1) Lowers monthly payments, 2) Reduces total interest, 3) Helps avoid being 'underwater' (owing more than the car's worth). On a $25,000 car, $5,000 down means financing $20,000 instead of $25,000—saving roughly $800 in interest over 60 months at 6% APR.

Compare both options. Dealer financing offers convenience and sometimes promotional 0% APR rates, but may have hidden fees or require you to forgo rebates. Banks/credit unions often offer lower rates, especially if you're a member. Get pre-approved by your bank first, then see if the dealer can beat it.