- The term of an auto loan is usually between 24 and 72 months. The interest rate will depend on your credit history: The lower the risk you appear to pose of defaulting on your loan, the lower your interest rate will be. Use the following formula to calculate your monthly payment, where L is the loan amount, R is the annual interest rate, and M is the number of months in the term.
Payment = L (R / 12) / (1 - ( 1 + R / 12 ) ^-M )
For example, if you took out a $10,000 loan at 6 percent interest to be repaid over 60 months, your monthly payment would be $193.33. - To determine how much you will have to pay over the life of the car loan, multiply the monthly payment by the number of months of the loan. If your monthly payment is $193.33 for 60 months, the total you will pay is $11,599.80. When you subtract the amount of the principal, $10,000, from the cost, you find that the interest payments will total $1,599.80.
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