Auto Loan Calculator Terms
An understanding of the following can help you calculate accurate monthly car payments and make an informed decision on your auto loan terms:
Loan amount
The amount of money you choose to borrow for the loan. Note that this does not say ‘price of car.’ Only type in your loan amount, and not your actual vehicle cost.
Down payment
This is the amount of money you choose to put down to secure your vehicle.
Term (in years)
This is the amount of time you plan to make payments on your vehicle. Enter your term in years rather than months (i.e. 60 months is 5 years).
Factors Impacting Auto Loan Rates
When using the auto loan calculator, input your projected interest rate. Your rate is based on several factors. Here are a few of the most important:
Credit score
The higher your credit score, the lower APR rates you will qualify for.
Vehicle age
Newer vehicles are more expensive upfront, but they cost less to finance. Used vehicles often cost more in interest, but have a much lower price tag.
Term length
The longer your term, the lower your payments because you’re extending the repayment period. Because of this, you will likely pay more interest over time. The opposite is true of choosing a shorter term length.
How To Estimate The Most Accurate Loan Payment
To determine the most accurate loan payment, you will need to consider the following questions:
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What is my credit score?
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Is my desired vehicle new or used?
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What is my debt-to-income ratio?
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What term length can I afford?
