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If you’re shopping for your next vehicle, you may want to use a car loan payment estimator to figure out exactly how much your payments are going to be. This can be very useful, but at the same time, the process can be confusing. If you aren’t sure where to start, start with the right information.
An online car loan payment estimator is basically a glorified calculator that takes several pieces of information as inputs, and spits out payment information as the output. You’ll need three things to find out what your payment will be. First, you need the amount of principal of the loan. Note that this doesn’t include anything that doesn’t get financed, such as your down payment. Sometimes tax, title and tags get rolled into the loan, and sometimes they don’t, so make sure you know before you get going what your particular situation is, or your calculations are off.
The next thing you’ll need is your interest rate. This could be lower or higher, depending on your credit status and how much you’re planning to put down. If you know it, make sure there isn’t an “expiration date” on the offer you’ve received from your lender, because sometimes they offer interest rates that expire after a certain amount of time.
The other piece of information you’ll need for your car loan payment estimator is the length of your loan’s term, in number of months. Obviously, there are 12 months in a year, so a two-year term will be 24 months, a three-year term will be 36 months, a four-year term will be 48 months, and so on. Go ahead and enter the length of the term into the form.
Now, if you are good at math, you could probably figure all of this stuff out on your own. Just get out a pencil and paper, turn on your calculator, carry the two, and you should be able to calculate everything yourself. But why bother, when a car loan payment estimator will do it for you? That’s what they’re there for!
Once you have all of the information entered, go ahead and calculate your payment. If you got your numbers right, you’ll know more or less instantly how much you’ll pay on the loan if you accept the terms you put in. If you’d like to consider a shorter or longer term, or if you think you could get a different interest rate by offering a different down payment, you can play with the numbers. The result will be a close approximation of what your loan payment will be. You could do it yourself, but why do that when a car loan payment estimator is so easy to use?
Written by:
James Mayfield is the Director of Content at Santander Consumer USA and has been creating content on financial topics for more than 10 years. In addition to writing for the Santander, RoadLoans and Chrysler Capital blog sites, his work has…
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