| Year | Principal Paid ($) | Interest Paid ($) | Ending Balance ($) |
|---|---|---|---|
| {{ r.year }} | {{ format(r.principalYear) }} | {{ format(r.interestYear) }} | {{ format(r.balance) }} |
| Month | Principal ($) | Interest ($) | Payment ($) | Balance ($) |
|---|---|---|---|---|
| {{ r.period }} | {{ format(r.principal) }} | {{ format(r.interest) }} | {{ format(r.payment) }} | {{ format(r.balance) }} |
A car loan amortizes a vehicle’s purchase price over equal instalments, combining interest charges with gradual principal repayment. Because the interest is calculated on the outstanding balance, the portion allocated to principal grows each month while the interest share declines. Understanding this pattern helps you compare financing offers and predict the real cost of owning a new or used car.
This calculator subtracts any down payment from the loan amount, converts the annual percentage rate to a monthly rate, and applies the amortization formula to compute the minimum payment. It then adds any extra payment, iterates month by month until the balance reaches zero, and builds detailed monthly and annual schedules as well as interactive breakdown and balance charts.
For example, enter $30 000, 4.5 % interest, and a five-year term to see a $559 monthly obligation and total interest around $3 600. Adjust extra payments to preview how even ten dollars accelerates payoff. Figures exclude taxes, dealer fees, and insurance, so verify local charges before signing any contract.
Classic amortization finances a lump-sum purchase by charging compound interest on the declining balance while keeping each instalment equal. The car loan variant uses fixed-rate, fixed-term payments, normally expressed as an annual percentage rate (APR). Because the interest is prorated monthly, the effective periodic rate equals APR divided by twelve. The interplay among principal (P), monthly rate (i), and number of periods (n) determines both payment size and payoff speed.
| Interest Share (per payment) | Stage | Implication |
|---|---|---|
| ≥ 60 % | Early | Most cash services interest; balance falls slowly. |
| 40 – 59 % | Middle | Interest and principal portions are comparable. |
| < 40 % | Late | Repayments attack principal aggressively; payoff accelerates. |
Because interest is calculated on the remaining balance, its proportion of each instalment diminishes as principal is repaid. Extra payments shift the schedule leftward, reducing the total interest owed.
| Parameter | Meaning | Unit | Typical Range |
|---|---|---|---|
| Loan amount | Vehicle cost before down payment | $ | 5 000 – 100 000 |
| Down payment | Up-front cash reducing principal | $ | 0 – 50 % of cost |
| APR | Nominal annual rate charged | % | 0 – 20 % |
| Term | Total loan length | Months | 12 – 120 |
| Extra payment | Voluntary monthly surplus | $ | 0 – 500 |
Worked example (P = 30 000 $, APR = 4.5 %, n = 60 months, extra = 0):
The first instalment allocates 112.50 $ to interest and 446.79 $ to principal, leaving a 29 553.21 $ balance.
The amortization equation originates from standard time-value-of-money theory documented in consumer-finance textbooks (Ross & Westerfield, 2018) and aligns with Federal Reserve Board payment tables.
All calculations occur entirely in your browser, so no personal or financial data leaves your device.
Follow these steps to model a financing scenario.
No, all inputs stay in your browser session and disappear when you close the page.
Interest is calculated on the full opening balance, so its share is largest at the start and declines as principal falls.
Any amount beyond the required instalment goes straight to principal, shortening the term and cutting total interest.
Yes, the tool sets APR to 0 %. Payments then equal principal divided by the number of months.
Model refinancing by treating the remaining balance as a new loan with its own term and rate.