Auto Loan Calc: How to Do the Math

Online auto loan calculators can help you determine the loan rate for an auto loan. These tools provide you with a way to calculate your loan rate and are easy to use and understand. Use these tools before purchasing your vehicle in order to have an idea of what the cost of your loan is and how much financing will affect your purchase.

These steps will help you access an online auto loan calculator. Use any of the websites available including those available in Yahoo!, MSN, Google or through sites such as the Wall Street Journal and Bankrate.com.

Step 1: Provide Loan Information

The calculator will ask you to provide information about the loan amount being requested, the term of years for the loan and interest rate. This information needs to be entered, along with information about the type of vehicle being purchased. This includes make, type and year of the vehicle.

Step 2: Use a Reasonable Interest Rate


The interest rate that you use for the loan should be based on the current interest rates for the car that you are seeking to purchase.

The loan rate that you choose should also be reflective of your credit rating. You should request your credit rating in order to determine the rate that is close to the credit rating and the amount that you will pay when you apply for the car loan.

Step 3: Calculate the Loan Rate


Once all of the information has been entered into the calculator, press enter and you should see a table that shows you the schedule of payments for each year of the loan. The payments will show the portion that is the interest and principal amount and will give you an ideal of the cost of the loan. Use different rates and years in order to see the difference in loan rates and the time it will take to repay the loan.

Conclusion

Loan calculators are a valuable tool and should provide you with good information about the type of loans that are available and the amount that you can afford. Try different loan calculators in order to compare results and verify the accuracy of the information.

 


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