§ 01 / TOOL
$40,000 at 7% APR for 5y.
STATUS ACTIVETYPE FIXED APRLATENCY <1MS
> INPUT
MODE FIXED APR
// AMOUNT FINANCED
$
// APR
%
// TERM
yrs
MONTHLY PAYMENT.
AUTO LOAN
// RESULT
$792.05
// TOTAL PAID
$47,523
// INTEREST
$7,523
// PAYMENTS
60
// LOAN
$40,000 @ 7% for 5 years
Financing $40,000 at 7% APR for 5 years costs $792.05/month. Total interest: $7,523.
§ 02 / ABOUT
What the car actually costs.
An auto loan is a fixed-APR installment loan — same amortization math as a mortgage, just shorter terms and higher rates. Your monthly payment covers principal plus interest; the sticker price plus tax, title, and fees is what you're actually financing.
// WHAT DRIVES THE NUMBER
- Loan amount — sale price + sales tax + fees − trade-in − down payment.
- APR — your rate depends on credit score, lender, and the vehicle. Credit unions typically beat dealer financing.
- Term — a longer loan means a lower monthly payment but more total interest, and risks owing more than the car is worth.
// THE 20/4/10 RULE
A classic guideline: put at least 20% down, finance no more than 4 years, and keep total transportation costs (payment + insurance + fuel) under 10% of gross income. The 72- and 84-month loans dealerships push break every part of this.
§ 02 / FAQ
Questions. Answered.
How is an auto loan payment calculated?+
Standard fixed-rate amortization: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1], where P is the amount financed, r is the monthly APR (annual / 12 / 100), and n is the total number of monthly payments (years × 12). The result is the flat monthly payment that pays the loan off at the end of the term.
What should I enter as the amount financed?+
Enter the sticker price minus your down payment minus any trade-in value, plus taxes and fees that are being rolled into the loan. That’s the actual principal the lender is financing — what they charge interest on. It is not the car price alone.
What’s a typical auto loan APR?+
APRs swing with the Fed rate and your credit score. As of early 2026, new-car APRs for excellent credit (750+) are often in the 5–7% range; fair credit (620–690) sees 9–14%; subprime (below 620) can be 15%+. Used-car loans run 1–3 percentage points higher than new.
Is a longer term always cheaper per month?+
Yes in monthly payment, no in total cost. A 72-month loan has a smaller payment than a 48-month loan on the same amount, but you pay significantly more interest overall and stay upside down (owing more than the car is worth) for longer. 72+ month loans are where people get into trouble.
Does this include sales tax, title, or registration?+
Only if you include them in the amount financed. This is a pure monthly-payment calculation on the principal you enter. It does not model taxes, fees, GAP insurance, or service contracts — those typically get added to the amount financed before you type it in.
Does the URL update so I can share?+
Yes. As you type, the URL updates to /auto-loan/25000-7.5-5 (amount-APR-years). Copy the URL bar or use the SHARE button to send the scenario to someone.
§ 04 / TOOLS
Related calculators.
§ 05 / READING