Interest Rate On Car Loan Calculator

Enter the following information to calculate the interest rate on a car loan:

How To Calculate The Interest Rate On a Car Loan

1. Gather your information:

You'll need to know the following:

• Loan amount (principal)
• Total amount you'll repay (including interest)
• Loan term (length of the loan in months)

This information should be included in your loan agreement.

2. Calculate the total interest paid:

Subtract the loan amount (principal) from the total amount you'll repay to find the total interest paid over the life of the loan.

3. Calculate the monthly interest rate:

Divide the total interest paid by the product of the loan term (in months) and the loan amount (principal).

4. Convert the monthly rate to an annual percentage rate (APR):

Multiply the monthly interest rate by 12 and then by 100 to express it as a yearly percentage.

For example, let's say you borrow $20,000 for a car loan and repay a total of $25,000 over 60 months. Here's how to calculate the interest rate:

• Total interest paid = $25,000 - $20,000 = $5,000
• Monthly interest rate = $5,000 / ($20,000 x 60 months) = 0.004167
• Annual interest rate (APR) = 0.004167 x 12 x 100 = 5%

Therefore, the interest rate on your car loan is approximately 5%.

Share Your Thoughts

We welcome all feedback and suggestions on how to improve our free online calculators. If you have any suggestions on how to improve this calculator, please feel free to reach out to us.