Car Payment Calculator
Calculate Car Payment
Estimate your monthly car payment
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Bi-Weekly Car Payment
Calculate bi-weekly payment and savings
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Formula
M = P x r(1+r)^n / ((1+r)^n - 1), where P = loan principal, r = monthly interest rate, n = number of months
Frequently Asked Questions
How is a car payment calculated?
Car payments are calculated using the loan amortization formula: M = P x r(1+r)^n / ((1+r)^n - 1), where P is the loan principal, r is the monthly interest rate, and n is the number of months. The principal is the vehicle price minus your down payment plus any taxes and fees.
What is a good monthly car payment?
Financial experts recommend keeping your car payment at or below 15% of your take-home pay. For example, if you bring home $4,000/month, aim for a car payment of $600 or less. The total cost of vehicle ownership (payment, insurance, gas, maintenance) should not exceed 20% of income.
Should I choose a longer loan term for lower payments?
While longer loan terms (72-84 months) lower your monthly payment, you pay significantly more in interest over the life of the loan. You may also end up owing more than the car is worth (being 'underwater'). Most experts recommend 60 months or less.
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