Auto Loan and Refinancing Calculator
Since most cars are financed using simple interest loans, the auto loan calculator to your left uses simple interest calculation. The amount of your payment that goes towards interest is calculated based on your remaining principal balance amount, the interest rate for your loan, and the number of days since you made your last payment.
A simple interest auto loan works like this: if your lender receives a payment and it has been 12 days since you made your last payment, you will be charged 12 days worth of interest on the remaining balance of your loan. The rest of your payment goes towards your principal and reduces the amount owed on your remaining principal balance of the loan.
Auto Loan Fast Facts
Here are some fast facts about auto loans:
- You can still get financed if you have a poor credit history, however you should expect to pay higher interest rates.
- When financing a new vehicle, ask about adding gap insurance. Gap insurance helps you insure the difference between what you owe and its actual cash value, which is often less than what you owe.
- Most websites that let you apply for auto insurance electronically will let you know within 15 minutes to an hour whether you have been approved for your loan.
Used cars have higher interest rates than new cars. Here is a quick chart of how auto loan interest rates break down, from lowest interest rate to highest:
New Car < Used Car from a Dealer < Used Car from a private individual < Existing Loan Refinancing < Lease Buyout
Popular Auto Loan Financing Options
Many people have questions when shopping around for auto loans. Since financing a car can be a major investment, you should definately look for a reputable or well known loan company. Some of the more popular companies are:
- Capital One