FAQ
How is a car loan payment calculated?
Monthly payment = [Loan Amount × (r × (1+r)^n)] / [(1+r)^n - 1], where r is monthly interest rate and n is number of months. Our calculator handles this automatically.
What credit score do I need for a car loan?
670+ for good rates. 740+ for the best rates. Below 600 may require a subprime lender with higher rates. Your credit score significantly impacts the APR offered.
Should I choose a longer loan term?
Longer terms mean lower monthly payments but significantly more total interest. A 72-month loan at 6.5% costs thousands more in interest than a 48-month loan. Choose the shortest term you can afford.
Is it better to finance through a dealer or bank?
Compare both. Banks and credit unions often offer lower rates than dealer financing. However, dealers sometimes have manufacturer promotional rates (0% APR) on new cars.
How much should I put down on a car?
Aim for at least 20% down to avoid being upside-down on the loan. This also reduces your monthly payment and total interest paid.