Car loan calculator repayments
How to Calculate Car Payments
How to Calculate Car Payments. You’ve just seen the car of your dreams, but you’re not sure if the price is right. In a few steps, you can calculate your potential car payments and decide if you’ll be able to afford a new ride. You will need Scientific calculator Pen and paper and online payment calculator (optional).
- Step 1. Convert your loan’s interest rate to a decimal number by dropping the percent sign and dividing the number by 100.
- Step 2. Divide the interest rate on your car loan by 12. Write this number on a piece of paper.
- Step 3. Multiply the number by the loan’s principal amount — the total amount of your car loan. Write this number down, as it will be used in your final calculation. Remember to subtract any down payment you might make from the new car’s purchase price when figuring out the principal amount.
- Step 4. Recall the number you got from dividing the interest rate by 12 in step 2. Add 1 to this number.
- Step 5. Take the sum from step 4 raised to the power of the number of months included in the term of your loan. For example, if you will make 36 monthly payments, multiply the sum from step 4 by itself 36 times.
- Step 6. Calculate 1 divided by the result from step of your multiplication. Round this number to the nearest hundredths place to make it easier to work with.
- Step 7. Subtract this number from 1. Jot this number down for use in your final calculation. Avoid the math by using car payment calculators found on many auto dealer and bank websites.
- Step 8. Divide the number from step 3 by the number from step 7 for your final monthly car payment. Think about whether this will fit into your monthly budget.
How to Use a Car Loan Calculator
Getting financed for a car getting a car loan is usually inexpensive and often not completely understood undertaking if not correctly thought through it can wreak havoc on your finances setting yourself up for debt.
You won’t be able to pay back is definitely something you want to avoid this is why people came up with a gadget called a car loan calculator.
The calculator is often found on the websites of banks and car loan companies and its purpose is to help you asses your financial situation and plan your loan accordingly the point of these calculators is to inform you how much you will have to pay monthly.
The total amount you’ll have to return with APR and other things you might want to take into consideration they will usually have you enter in the loan amount the loan term in months or years and the annual interest rate an example of this would be entering loan amount of 20000$ a 48-month loan term and a 5% interest rate this would result in the calculator displaying your monthly payment of 460.59 dollar and the total interest you’ll have to return which in our case is 2100 8.12 dollar or nine fifty four percent of total payments.