How it works
A car loan is usually a fixed-rate installment loan: the same payment every month until the balance reaches zero. Each payment covers that month's interest first, and the rest reduces what you owe. For an unsecured loan with an origination fee, the personal loan calculator shows the true APR. Already have a car loan? See what a lower rate saves with the car loan refinance calculator.
Monthly payment = L × r(1 + r)^n ÷ ((1 + r)^n − 1)
L is the amount borrowed, r is the APR ÷ 12, and n is the number of monthly payments.
Worked example
Borrow $30,000 for a car at 7.5% APR over 60 months: $601.14 a month, and $6,068 of interest in total.
Stretch it to 72 months and the payment drops to $518.70, but interest rises to $7,347. Shorten it to 48 months and you pay $725.37 a month with only $4,818 of interest.
Things to know
- Compare APRs, not just rates. The APR includes the interest rate plus most lender fees, so it's the fairer way to compare offers.
- Longer isn't cheaper. A lower monthly payment over more months almost always means more interest in total.
- Cars lose value fast. On a long car loan you can owe more than the car is worth for years, which hurts if you need to sell.
- Check for prepayment penalties before paying extra. Most car and personal loans don't have them, but some do.
Questions people ask
What APR will I get?
It depends mostly on your credit score, the loan length and whether the loan is secured (like a car loan) or unsecured (most personal loans). Get quotes from a few lenders; checking your rate usually doesn't affect your credit score until you apply.
Does this work for a mortgage?
The math is the same, but mortgages also carry taxes, insurance and sometimes PMI. Use our mortgage calculator for the full payment.
Sources
- Consumer Financial Protection Bureau: the difference between a loan interest rate and the APR
- Federal Reserve: consumer credit (G.19), interest rates on auto and personal loans
Reviewed September 25, 2026 by The Dollars World team. How we build and check our calculators · Our data and formulas. This is general information, not financial advice.