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How to independently calculate a car loan


A personal car has long strayed from the detachment of inadmissible luxury in the ranks of the necessary means of transportation. Life is constantly moving, you need to be in time everywhere! Thanks to special banking offers and favorable conditions, now almost anyone with a stable income can take a profitable car loan. The benefits of a car loan have long been known, and thousands of car enthusiasts have already acquired their "iron horses" in this way.

Loan payment calculator - calculate auto loan online. If you plan to take out a loan to buy a car, then not only it can, but also the question should arise about the correct calculation of a loan for a car. All calculations will not take much time, but you will have the opportunity to distribute your income and strength!

Loan calculation can be done even at home. The service of calculating a loan for a car online is provided by many banking organizations. Moreover, a loan calculator is available even to people far from information technology.

To calculate a car loan, you should go to the website of the selected bank, which will issue a loan, and get into the car loan section. There will probably be the calculator you need.

Car loan concept

You can buy a car on credit at almost every bank. Since this is one of the most common lending programs, which also enjoys great interest among individuals. Car loan is a targeted banking product. That is, money is transferred by bank transfer to the account of the seller of the vehicle. The use of funds for other purposes is fraught with penalties up to the requirement of early repayment of the loan.

Almost every car loan provides the following options:

  • Down payment - on average from 10-15%, but can be either zero or more than the specified values. It all depends on the type of car, its age, manufacturer, as well as other conditions.
  • The term of the contract is from 1 to 7 years. For new cars of foreign manufacture, loans are provided for a longer period than for used ones.
  • Interest rate - here the variations in the values ​​are very diverse. On average, car loan fees range from 7 to 12% per annum.
  • Collateral - usually a car is transferred as collateral, which is purchased for credit money.
  • Insurance - CASCO is almost always required, compulsory motor third-party liability insurance, and sometimes personal insurance.

What information is needed to calculate

To choose the optimal loan conditions that will not create problems during debt servicing, it is recommended to calculate a car loan on your own. For an indicative calculation, the potential borrower needs to know all the parameters of the loan program, namely:

  • car cost
  • loan terms,
  • interest rate,
  • down payment amount.

In addition to the above conditions, insurance also has a significant impact on the size of the loan. Very often, banks include it in the loan amount, which accordingly increases the size of the monthly payment.

Loan calculation with down payment

Many potential customers are interested in the question of how to correctly calculate a car loan, if in the conditions there is an initial payment. This parameter directly affects the amount of financing - the larger it is, the smaller the size of the loan. The mandatory down payment is indicated as a percentage of the cost of the car. That is, if the terms of the program specify 15%, and the cost of the car is 700,000 rubles, then the advance amount will be 105,000 rubles, 595,000 rubles - a loan. Depending on the last digital value, a monthly car loan payment will be calculated.

Loan calculation without advance payment

To make the purchase of a car more affordable, vehicle sellers, along with banks, offer to buy a car without a down payment. How is a car loan calculated in this case. Everything is extremely simple. This option provides that the down payment is zero, and the loan amount - the full value of the vehicle. That is, only the price of the car affects the size of the monthly payment.

What is the interest rate on the loan

The price of a loan for a borrower is determined by the level of interest rate. Therefore, car dealerships often carry out various campaigns with banks, according to which it is possible to take a car on credit at a car dealership at a very low percentage. And also a good offer is to buy a car under the state support program. With its help, a car loan can be issued at a rate of 6.4% per annum.

It should be noted that many lenders impose fines for non-fulfillment of certain conditions - for example, due to the absence of a personal insurance contract or CASCO, the loan payment increases by 1-2 pp, or even more.

But not only the loan fee includes accrued interest, in order to increase the profitability of the transaction, banks can set commissions - both monthly and one-time, for example, for servicing a car loan.

The formula for calculating the monthly payment

The following factors influence the size of the monthly payment:

  • amount of credit,
  • interest rate,
  • contract term
  • repayment schedule - annuity or classic.

The formula for calculating a car loan on a standard schedule is simpler than on an annuity one. Here you just need to divide the loan body by the number of months during which the car loan will be repaid. The maximum percentages are calculated using the following formula:

Loan amount *% / 12.

To get the final result, you need to add the maximum amount of accrued interest to the monthly payment by body.

To calculate the payment according to the annuity schedule, the following formula is used:

Kr - loan amount,

k is the annuity coefficient.

The last value is calculated by a special formula:

k =% * (1 +%) N / ((1 +%) N - 1), where

% - monthly interest rate. To get it, you need to divide the annual by 12 (the number of months in a year),

N is the number of months the loan is valid.

Car loan calculation example

For example, a client wants to buy a car worth 800 thousand rubles. The bank offers him to issue on the following conditions:

  • down payment - 15%,
  • interest rate - 12.5%,
  • loan term - 7 years.

First you need to determine the amount of the loan. To do this, calculate the size of the mandatory contribution: 800,000 * 15% = 120 thousand rubles. Total, the bank can finance the client for 680,000 rubles.

If the contract provides for a differentiated schedule, then the maximum monthly payment will be as follows:

  • loan body: 680,000 / 84 = 8095.24 rubles.,
  • percent: 680,000 * 12.5% ​​/ 12 = 7083.33 rubles.

As a result, the monthly payment will amount to 15178.57 rubles.

Now, under the same conditions, we calculate the monthly payment according to the annuity schedule. First you need to find the monthly interest rate: 0.125 / 12 = 0.010417.

Next, we substitute the values ​​in the formula: 0.010417 * (1 + 0.010417) 84 / ((1 + 0.010417) 84 - 1) = 0.017921.

The resulting value is multiplied by the loan amount and we get 12186.44 rubles. This is the size of the monthly payment according to the annuity repayment scheme.

As you can see, the monthly payment on the annuity schedule is less than on the classic. But it will be so until the end of the contract, but the classic payment decreases every month.

How to calculate a car loan payment online

Today, it is not necessary to calculate a car loan payment on your own in Excel or on a calculator. Absolutely all banks posted online calculators on their websites so that everyone could calculate their monthly car loan monthly payment taking into account the parameters of the loan program. To make an online auto loan calculation at a bank, you only need to enter the following values ​​in the appropriate fields:

  • car cost
  • loan terms,
  • down payment amount.

In most cases, the interest rate does not need to be indicated; it is automatically adjusted taking into account the loan conditions. Its size can be influenced by such factors:

  • personal insurance
  • customer category
  • vehicle condition.

Therefore, in order to more accurately calculate the online loan for a car, you must also put marks that correspond to the parameters of the transaction in certain fields.

How to find out the amount of a monthly payment

It’s easy to calculate a monthly car loan monthly payment using the online calculator, you just need to fill in the appropriate fields. Considering that most credit programs have an annuity repayment schedule, the result that appears on the screen after the calculation will correspond to the monthly payment until the end of the contract.

It will be possible to more accurately calculate the payment only at the bank. When drawing up a loan schedule, the loan manager will take into account all the nuances of the transaction, such as customer category, down payment amount, availability of income information, loan term, and make the correct calculation. If the result is satisfied with the potential client, his income is quite enough to service the debt, you can safely apply for a car loan. It is advisable that the monthly loan costs do not exceed half of the monthly income.

How to find out the final cost of a loan

To determine which loan is best for a potential borrower, you should not always pay attention to the size of the interest rate. Sometimes a small loan payment is leveled by large commissions and additional costs. For example, CASCO in one bank will be more expensive than in another, or else the client will be required to take out personal insurance, which increases costs.

Therefore, in order to calculate the cost of a car loan, first of all, you need to find out the amount of accrued interest for the entire period of the contract. This information can be obtained from the bank printout. Then you need to find out about insurance rates: according to the CASCO policy, personal insurance. It is also important to consider that life insurance and a car will have to be annually until the end of the contract. These costs should also be added to the accrued interest.

Also, the notary expenses and bank fees that may accompany the transaction will fall on the borrower.

After all the costs are taken into account, the final amount will determine where it is best to get a car loan. It is worth considering that a potential borrower can get all the necessary information only at a bank branch. It is very difficult to make a loan calculation on your own, taking into account all expenses, and an online calculator will not help in this matter.

What to do to reduce loan costs

The size of the loan overpayment is mainly affected by:

  • amount of credit,
  • interest rate,
  • term of the contract.

The larger they are, the greater the overpayment. Therefore, to reduce the cost of a car loan, all these parameters must be reduced. For example, when applying for a loan, it is advisable to pay a large amount of the down payment, to take a loan for a shorter period. The main thing is not to overdo it so that the size of the monthly payment is comfortable for repayment.

You can further reduce loan costs with the help of private and full early repayment. If there is free money, the borrower is advised to increase the size of the monthly payment. Thus, it quickly reduces the balance on the body of the loan. As a result, the amount of accrued interest is reduced and the term for using a loan is reduced. And with full early repayment, interest is accrued only for the actual period of use of money.

In addition to interest, with early repayment, the borrower saves on insurance. After all, if he repays the loan earlier, he will no longer have to conclude an insurance contract.

To summarize

Calculating a car loan is easy. The main thing is to know all the parameters of the upcoming transaction:

  • car cost
  • maximum loan term,
  • interest rate
  • down payment amount.

Using these data, you can find out the size of the monthly payment to conclude how much the availability of credit will affect the family budget. A preliminary payment calculation can be done independently on the bank's website using an online calculator. But the final is best done in the bank’s division - there the loan manager will build a payment schedule taking into account all the nuances of the transaction.

Before making the final choice in favor of a lender, a potential borrower needs to calculate not only the overpayment on the loan for the entire duration of the contract, but also take into account such additional costs as:

  • annual insurance payments
  • bank fees
  • payment of notary services.

By the way, choosing what is best - to buy a new car or a used one, it should be noted that a loan for a used car will cost more due to not only the interest rate, but the size of the CASCO.