Car loan calculator
Repayments and total interest on a car loan, with the effect of a longer term and of paying a little extra each time.
Monthly repayment
$718.08
19% of everything you repay is interest
- Total interest
- $8,084.65
- Total repaid
- $43,085
- Paid off in
- 5 years
| Amount borrowed | $35,000 |
|---|---|
| Interest | $8,084.65 |
| Total repaid | $43,085 |
$35,000 over five years at 8.5% costs about $718 a month and $8,090 in interest — stretching it to seven years cuts the payment to $556 but adds roughly $3,600.
Over the life of it
How this is calculated
The same amortisation as a mortgage, over a shorter life
Each repayment covers the interest accrued since the last one, and whatever remains reduces the balance. On $35,000 at 8.5% the first payment is roughly $248 interest and $470 principal, and the split moves steadily towards principal.
payment = P × r ÷ (1 − (1 + r)^−n)Longer terms trade payment for cost
Going from five to seven years drops the monthly payment about 23% and raises total interest about 45%. Car values fall faster than the balance on a long loan, which is how borrowers end up owing more than the car is worth.
The advertised rate is not the whole cost
Establishment fees of $250 to $600 and monthly account fees of $5 to $15 sit outside the rate, and dealer origination margin sits inside it. A comparison rate that folds the fees in is the only figure that ranks two offers correctly.
Worked example: $35,000 over five years at 8.5%
| Amount | $35,000 |
|---|---|
| Rate | 8.5% |
| Term | 5 years |
| Monthly repayment | about $718 |
|---|---|
| Total interest | about $8,090 |
| Total repaid | about $43,090 |
Adding $100 a month clears the loan roughly eight months early and saves close to $1,100 of interest, because every extra dollar comes straight off the balance.
What this assumes
- A fixed rate for the whole term.
- Principal and interest repayments with no balloon.
- Fees excluded from the rate.
- No early repayment penalty.
Where this commonly goes wrong
- A balloon or residual payment makes the monthly figure look competitive while leaving a large lump sum due at the end, financed again or paid from savings.
- Dealer finance is often quoted as a flat rate on the original amount, which is nearly double the equivalent reducing-balance rate.
- Seven-year terms on a depreciating asset routinely leave the balance above the resale value for the first three or four years.
Questions
What are the repayments on a $35,000 car loan?
About $718 a month over five years at 8.5%, with roughly $8,090 of interest across the loan. Weekly repayments of about $165 shave a small amount off the total by reducing the balance more often.
Should I take a longer car loan term?
Only if the payment is genuinely unaffordable otherwise. Stretching $35,000 from five to seven years saves about $162 a month but adds roughly $3,600 in interest, on an asset that keeps losing value.
What is a balloon payment?
A lump sum left owing at the end of the term, often 20% to 40% of the price. It lowers the monthly repayment because you are only amortising part of the loan, but the amount still has to be paid or refinanced.
Is dealer finance more expensive?
Usually. Dealer rates often include an origination margin, and flat-rate quotes charge interest on the original amount rather than the reducing balance — a 5% flat rate is close to 9% in real terms.
Does paying extra on a car loan help?
Yes, provided there is no early repayment fee. An extra $100 a month on $35,000 at 8.5% clears the loan around eight months early and saves close to $1,100, because it reduces the balance interest is charged on.
What is negative equity on a car loan?
Owing more than the car is worth. It is common in the first years of a long loan because cars typically lose 15% to 20% of value a year while the balance falls slowly, which becomes a problem if the car is written off or sold.
Related tools
Sources
This calculator does arithmetic on the figures you enter. It does not account for tax, fees, or your personal circumstances.
T0