Auto Loan Calculators

March 15, 2012

There are plenty of auto loan calculators online, but how do you get started with them? Learn how to calculate auto loan repayments online.

Auto Loan Calculation Auto Loan Calculation

Auto loan calculators are great tools to figure out your future payments. Most people don't go in to a car dealership with a bundle of cash and pay it off right there. They get a loan. There are many factors that cause loan prices to go up or down, or make some better than others. You have to factor in the length of the loan, interest rates, etc.

There are many online auto loan calculators to try on the Internet, but you may find it more convenient to use a downloadable Excel template like this spreadsheet instead. You can enter things such as your monthly payment, interest rate, loan period, sales tax, credit rating and the down payment. You can also use it to figure out if you want to refinance. It really makes no sense not to use an auto loan calculator. It can do the math in a split second, and can help you compare different loan options you may be looking at. It can help differentiate from two loans that may look alike, but one difference causes one or the other to be more or less expensive.

Car loan calculators help when you are trying to negotiate a loan with a dealer. Often, if you show that you're knowledgeable, you will not be preyed upon and will have a serious negotiation. Using an auto loan calculator helps you both with figuring out potential loans, and also getting the right loan for you that you can afford.

Many consumers also use loan calculators to determine the payment schedule on bad credit auto loans. Bad credit auto loans normally have very strict requirements for repayment. Understanding exactly what the terms and conditions of the loan mean prior to signing on the dotted line is important for any consumer thinking of taking out a loan. Utilizing the auto loan calculator, a car shopper can also see how much interest is paid over time, and see the benefits of taking out a shorter term loan with a lower interest rate, in comparison to a long term loan in which the interest will, in most cases, be nearly as much as the purchase price for the car.

How to Calculate Auto Loan Repayments

Calculating loan payoff is a simple type of research that can drastically change how car buyers view loan offers they are given, and can outline the importance of weighing your options before buying. Prior to buying a car, use the following steps to calculate your monthly payments.

  • Get the car's actual value. To calculate the auto loan, you must begin with the value of the vehicle you intend to buy. Do not use an approximate value, as this will make the calculation inaccurate. Bear in mind, you must be using the actual price, rather than the sticker price, so take this into account if you successfully negotiate a discount.
  • Factor in the loan percentage. An auto loan formula can be created using the interest rates being offered, which can be used to calculate the auto loan. Applying this figure to the cost of the vehicle enables you to determine how much the car will actually cost.
  • Factor in any unique policy terms. There are terms and conditions of the loan agreement that must be taken into account. The contract may provide for a percentage on a monthly and an annual basis. Specific auto loan amortization requirements are likely to be specified, such as repaying the loan within a certain number of months.
  • Multiply all factors. Turn the loan rate percentage into a decimal figure, and multiply it by the car's value. The resulting figure can then be divided by the number of months the loan is set up for.

You should also try calculating with a set of different values. This helps you understand how the payments may vary, and helps to find the right loan terms.

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