Auto loan calculators

An auto loan calculator is an invaluable tool when you want to know the amount of monthly payment you need to pay for the auto loan. You can use online auto loan calculators that enable you to compute the monthly charges needed in making your payments. By using the auto loan calculators online you can have a pretty good idea how much of a monthly payment will be required for your loan. Also, you can verify the calculation methods used by the lender.

In order to compute the monthly payment using auto loan calculators you need to know the purchase price before tax. Then deduct the trade in amount from the gross selling price. The net price is then multiplied by the sales tax rate and then added along with any fees to the gross purchase price to get the total price of the car. Then deduct the amount you paid as a down payment and the net trade-in amount. Net trade-in refers to the trade-in value less the balance owed on the car being traded in. After deducting the down payment and net trade-in amount you will arrive at the Loan Amount. Next, you need to multiply the interest rate with the number of years the loan is applicable to get the total interest payable. Then spread this interest out to the total loan term to get the monthly payments needed.

There are different auto loan calculators you can use online. They may arrive at a different amount when you use them but they more or less give you an idea on the range of auto loan payments you are expected to make. They are also helpful in showing you what you can afford and which auto loan you should pursue. In using the auto loan calculators you will often come across the following terms:

• Interest rate is a term used in auto loan calculators which refers to the annual charge for the borrowed money. The interest rate is usually stated in a percentage. Interest rates vary from lender to lender.
  
  
• APR or annual percentage rate refers to the yearly rate of interest and other fees or the costs paid in order to acquire the loan. APR combines the fees and interest into a single rate.
  
  
• Term is used in auto loan calculators to refer to the length of time for the loan.
  
  
• Cash down is the amount of cash paid as down payment. Trade-in allowance used in auto loan calculators is the total dollar amount assigned to your car in cases of a trade-in.
  
  
• Trade allowance is the total dollar amount assigned to your car in cases of trade-in.
  
  
• Amount owed in trade is the total loan balance still outstanding on the car being traded-in.
  
  
• Taxable fees used in the auto loan calculators refer to any additional fee subject to sales tax. Non-taxable fees are those fees not subject to sales tax. This might be document fees and other fees due at delivery and not taxable.
  
  
• Sales tax rate required in auto loan calculators refers to the total amount of sales tax on the purchase. In most states sales tax is computed by deducting trade-in value to the purchase price in order to get the sales tax amount. Some states base sales tax on the gross purchase price.
  
  
• Total down is the net amount paid as down payment. This is computed by getting the cash down plus trade-in and then you deduct the outstanding loan balance on trade-ins.
  
  
• Sales price in the auto loan calculators refers to the total price of the car.
  
  
• Loan amount is the total amount of your auto loan.