How Much Interest Will You Pay on a Car Loan?
Learn how APR, amount financed, and loan term determine the interest paid over an auto loan.
Interest is the cost of borrowing money. In a standard fixed-payment car loan, each scheduled payment is divided between interest and reduction of the balance. The interest portion is calculated from the outstanding balance and the periodic interest rate.
Why early payments can contain more interest
When the balance is larger, the interest charge calculated for that period is larger. As the balance falls, the interest portion generally falls too, while more of the scheduled payment goes toward principal.
APR and term both matter
A higher APR increases the periodic interest rate. A longer term creates more scheduled payments. Looking only at the monthly payment can therefore hide differences in total interest.
Use the calculator
Enter the amount, APR, and term, then compare total interest and total paid. Try a second APR or term to see how sensitive the result is.
Test your own amount, APR, down payment, and term.
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