If you're planning to purchase a car or refinance an existing auto loan, it can help to use a loan calculator to predict your monthly payments and estimate your principal and interest amounts. This type of calculator is also extremely helpful when comparing multiple vehicle financing options from different potential lenders.
Auto Loan Calculator from LoveToKnow
This free calculator from LoveToKnow is easy to use. Simply plug in the necessary information to get started.
Information You'll Need
Before you get started, you'll need the following information about your loan:
- Principal amount - This is the amount of money you're borrowing.
- Interest rate - This is the annual percentage rate (APR) for your loan.
- Term - This is the number of years you'll be taking to pay back the money, usually between three and six years.
- Start date of the loan - This is the month and year you'll begin paying on your loan.
Using the Calculator
- Input the necessary information.
- Press "Calculate."
- View the amortization schedule, total amount of interest, and total of all payments.
- Print this data if desired.
Understanding the Amortization Schedule
An amortization schedule is a chart that shows you exactly how much of each payment goes to interest and how much goes to paying off your loan. Remember, that in any annually compounded loan, you'll be paying more interest in the early months and years of your loan. As the amount of money you owe decreases, so does the interest you pay.
In the chart you receive from this calculator, you'll see the following columns:
- Month - This is the month you will make this payment.
- Year - This is the year you will make this payment.
- Principal - This is the portion of your payment that goes toward paying off the principal of the loan.
- Interest - This is the portion of your payment that goes toward paying interest on the loan.
- Balance - This is how much of your loan principal is left after you make this payment.
Keep these tips in mind as you use the calculator:
- When you're comparing two or more loan options, always input the data separately and compare the amortization schedules side by side.
- Remember to enter your loan term in years, rather than months.
- Always run the numbers twice for a loan, since it's easy to make a small mistake when inputting information. That way, you can feel confident in your results.
A Great Tool
Whether you're hoping to refinance your auto loan or are trying to decide exactly how much car you can afford, an auto loan calculator with amortization schedule is a great tool to have on hand. Use this calculator before you head to the dealership, so you can feel confident about your car-buying budget.