Are you looking to borrow money in order to purchase a vehicle? Are you new to auto loans, and wish to know more about how they work – how they are calculated? This simple auto loan calculator is designed for newcomers to understand auto loans and loans in general, and is simplified so that just about anyone can use it. All it requires from you, the user, is the input of three individual pieces of information: the size and length of the loan, followed by the interest rate. As always, it is worth shopping around the various suppliers of auto loans before using the calculator. That way, you can gather various figures and input them so as to figure out which deal is best for you.
How to use it
Again, this auto loan calculator is very simple to use. It requires just three pieces of information, readily available from any lender or dealer that provides auto loans. The first of these pieces of information is obviously the size, or amount of the loan. This will likely be around the amount required in order to fund the purchase of your new vehicle, but could vary – be sure to check how much each lender is offering, and if that covers the cost. Secondly, there is the duration of the loan. The average length of auto loans used to be around 5 years, but has since crept up towards 7. Finally, there is the interest rate, which will differ depending on the lender and your situation. Inputting these figures will give you three back: your monthly payment, total interest and total payment.
So as to test the auto loan calculator, we can input various average figures as a simple example. Let’s begin by imagining that a person is looking to take out a $25,000 auto loan, which is the national average. We enter this figure into the box marked “Auto Loan Amount”. Below this, under the “Loan Length”, we can input 5 years. The calculator requests this figure in months, so we can enter 60 months. Finally, let’s enter a typical interest rate for an auto loan: 4%. Upon clicking on “Calculate”, we are given three results. Our monthly payment with those figures would be around $460. The total interest would be $2,625, therefore we would pay back $27,625 in total for this $25,000 auto loan.