This free auto loan comparison calculator will automatically calculate and compare up to 4 different interest rates and loan length combinations so you can see your monthly payment as well as the total amount of interest you will pay for each term. (Click here to jump directly to the calculator)
Find Out Which Loan is Right for You
Whether you are buying a new or used vehicle, car loans can be expensive. According to the Bureau of Labor Statistics, the average family spends about 17% of their income on transportation, including car payments, interest, fuel, and maintenance. This is second only to mortgage or housing expenses.
Keeping this in mind, it is important that you shop for the best rates possible. Even a fraction of a percent can make a big difference in the total cost to you, especially with a longer term loan.
Also consider the fact that cars depreciate in value quickly, therefore, it is best to make a good down payment and take the shortest term that you can afford so that you still have some resale or trade-in value once your loan is paid off.
Using The Auto Loan Comparison Calculator
The auto loan comparison calculator will allow you to view the results of a shorter versus longer term period, compare various interest rates, and see the effects of making a larger down payment. Knowing where you stand, and realizing both the monthly and total interest cost of borrowing for a vehicle will help you make better financial decisions and choose the option that is best for your budget and lifestyle.
Principal Amount: You can play with this figure, adjusting it for various amounts depending on the down payment, or you can compare the cost of two different vehicles to see how much a less expensive car will save you in the long run.
Interest Rate: Compare the effects of the various interest rates being offered by each bank or lender. Interest percentages can make a big difference, and doing a little bit of shopping may save you a lot of money. Don’t accept the first loan approval you come across because interest rates can vary significantly from one lending institution to another.
The auto loan comparison calculator on Debtsteps.com is a great tool for anyone in the market for buying a car.
The application is so simple and straightforward to use, so it really makes it simple and easy to compare your options in terms of a loan.
I came prepared with different principal costs, interest rates and numbers of payments and when I hit compute, the calculator opened my eyes to how just a few tenths of a percent could save you money in the long run.
The application runs smoothly and I had no issue with it. I simply got down to calculating what loan was the best option for me in the long run when buying a car.
If you’re in the market for buying a car, I highly recommend you head to Debtsteps.com’s auto loan comparison calculator before you sign the dotted line. You won’t regret it, and the free service could save you a boatload of cash!
Posted by: Eva
For example, with a quick internet search, you can find one lender offering a 48 month term at 5.5% interest while another is offering this same term at 2.55%. If you are approved for the second rate, you would be acquiring a car loan at less than half the first bank’s interest percentage. On a $10,000 loan, that will save you approximately $13 a month and $633.83 in interest charges.
NOTE: If the interest rates available to you are more than 2 points higher than the average going rates, you should work on improving your credit score before you take a car loan.
Number of Payments: Just like interest rates, length of term can make a big difference both in your monthly payment and total interest costs. Again, it is best to pay your car loan off as quickly as possible to save interest and retain your vehicles resale or trade-in value.
For example, if you borrowed $10,000 for a 3 year term at 5% interest, your payments would be $299.71 per month with a total interest cost of $789.52. If you extended this term to 4 years, your payments would be $230.29 per month with an interest cost of $1054.06. If you can afford the extra monthly amount, you would save $264.54 in interest. This is assuming that the interest rate is the same for both terms, but it is important to note that longer terms typically come with higher rates.
Of course, the extra $69.42 per month may be a strain on your budget, so the additional interest charges may be a worthwhile trade-off for the lower payments. This is where the auto payment calculator can give you a visual side-by-side comparison so you can weigh your options and make the best choice for your situation.
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