Auto Loan Calculator
Car Loan Guide: Getting the Best Auto Financing
How Car Loans Work
Auto loans are installment loans where you borrow money to purchase a vehicle and repay it (with interest) over time. Key components:
- Principal: Amount borrowed (vehicle price minus down payment)
- Interest Rate: Annual cost of borrowing (APR)
- Term: Length of loan (typically 36-72 months)
Current Auto Loan Rates (2024)
| Credit Score | New Car Rate | Used Car Rate |
|---|---|---|
| Excellent (720+) | 4.5% - 5.5% | 5.0% - 6.5% |
| Good (680-719) | 5.5% - 7.0% | 6.5% - 8.5% |
| Fair (640-679) | 7.0% - 10% | 9.0% - 12% |
5 Tips for Better Auto Financing
- Improve your credit score before applying (even 20 points helps)
- Make a substantial down payment (aim for 20% or more)
- Compare lenders - banks, credit unions, and dealerships
- Choose the shortest term you can afford to minimize interest
- Get pre-approved before visiting dealerships
Pro Tip: For every $1,000 you finance, expect to pay about $20/month on a 60-month loan at 5% interest.