Auto Loans

Finding an Easy to Understand Vehicle Payment Calculator

Like most people, you probably can’t pay cash for your vehicle. When you’re ready to buy a car, you may visit a dealership or contact your local bank for financing. This is an exciting time as you prepare to sign the loan agreement and take possession of your new car. However, your excitement can come to a screeching halt once you learn the monthly payment on your new vehicle. The payment might be more than anticipated, and you may question whether you’re able to meet this expense. This is an awkward situation, as you must quickly decide whether to sign the loan agreement.

Whether or not this has been your experience in the past, this scenario stresses the importance of using a vehicle payment calculator before shopping for a car. This tool estimates your car payment based on a particular price and interest rate. An excellent resource if you have to stick to a strict budget, as you can avoid test driving and falling in love with cars priced higher than your maximum. But the question is not whether you should use a vehicle payment calculator when shopping for a car, but rather how to find an easy to understand calculator.

Payment calculators differ, but fortunately, websites such as have simple auto loan calculators to help you determine what’s affordable or estimate your payment. To get started, you only need basic information.

1. Provide the sale price of the car

To estimate the payment of any car, you will need to know the vehicle price. There are several ways to obtain this information. You can visit different dealerships and compare prices, or if a specific dealership has a website, you can browse their selection and check prices of cars that meet your needs. Enter the cost of the car in the field that asks for the “total loan amount” or “vehicle price.” If you plan on giving the bank or dealership a down payment, subtract your down payment amount from the sale price of the car. This figure will be your total loan amount.

2. Choose an auto loan term

In calculating the payment for a car loan, you need to decide the most appropriate term for your auto loan. Auto loan terms vary, and typically, you can select a term anywhere from 12 months to 72 months. The longer your loan term, the less you will pay each month. However, a longer loan term results in additional interest charges.

3. Determine your interest rate

Only a lender can confirm your interest rate on a vehicle loan. However, based on your credit score and history, you can estimate your interest rate when using a vehicle payment calculator. Visit any bank or credit union’s website, and they’ll include their standard APRs for new and used vehicle loans. If you know your current credit score (ballpark), you might be able to accurately estimate your rate on an auto loan. Enter the rate that you’re most likely to qualify for, and then calculate your estimated monthly payment. For example, if you apply for a $20,000 auto loan with a five-year term and an 4% interest rate, your monthly payment will be around $368 a month.

Understand, however, that online calculators vary, and some do not factor in sales taxes, rebates, registration fees or trade-in values, nor do they include vehicle protection add-ons. But despite the exclusion of these fields, an easy to understand vehicle payment calculator is the simplest and fastest way to get a fairly accurate estimate of your car loan payment based on price, interest and term.