Used Car Loan Calculator

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Reviewed by: David Chen, CFA
David is a Chartered Financial Analyst with 15 years of experience in consumer lending and used auto finance analysis.

This 4-in-1 Used Car Loan calculator helps you model your auto loan. Enter any three variables—Loan Amount, Annual Rate, Term, or Monthly Payment—and we will solve for the fourth.

Loan Amount ($) (P)

Annual Rate (%) (R)

Loan Term (Years) (T)

Monthly Payment ($) (M)

Used Car Loan Formulas

Solve for Monthly Payment (M):
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

Solve for Loan Amount (P):
P = M [ (1 + i)^n – 1 ] / [ i(1 + i)^n ]

Solve for Loan Term (T):
T = ln(M / (M – Pi)) / (n * ln(1 + i))

Solve for Rate (R):
Solved iteratively (no direct formula)

Formula Source: Bankrate – Loan Calculator

Formula Variables

(P) Loan Amount: The total amount financed for the used car, including taxes/fees and after your down payment or trade-in.
(R) Annual Rate: The fixed annual interest rate (APR) for your auto loan. Rates for used cars are often higher.
(T) Loan Term: The total number of years for the loan (e.g., 3, 4, or 5). Terms are often shorter for used cars.
(M) Monthly Payment: The fixed monthly payment.
(i) Monthly Rate: The annual rate divided by 12.
(n) Total Payments: The total number of payments (Term in years * 12).

Related Calculators

What is a Used Car Loan Calculator?

A Used Car Loan Calculator is a financial tool specifically designed to help you budget for a pre-owned vehicle. It operates on the same amortization principle as a new car loan, but the context is different. Interest rates for used cars are typically higher, and loan terms are often shorter, especially for older or high-mileage vehicles.

This 4-in-1 tool gives you the power to see the full financial picture. You can input the Loan Amount (P), Rate (R), and Term (T) to see your Monthly Payment (M). More importantly, you can work backward. If you have a firm monthly budget of $450 (M), you can solve for the total Loan Amount (P) you can afford, which helps you set a realistic shopping budget before you even visit a dealership.

Using this calculator allows you to compare different loan offers from banks, credit unions, and dealerships. It helps you understand how a slightly better interest rate or a shorter loan term can save you thousands of dollars in total interest, which is especially important on a used car purchase.

How to Calculate a Used Car Loan Payment (Example)

Identify Your Loan Details
You want to finance $20,000 (P) for a used car. Your credit union offers you a 4-year (T) loan at an 8.5% (R) annual rate. You want to find your Monthly Payment (M).
Convert Annual Rate to Monthly (i)
First, convert the annual rate to a monthly decimal: i = (8.5% / 100) / 12 = 0.085 / 12 = 0.0070833
Calculate Total Number of Payments (n)
Next, find the total number of monthly payments: n = 4 Years * 12 Months/Year = 48 payments
Apply the Amortization Formula
Use the standard loan payment formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
M = 20,000 [ 0.0070833 * (1 + 0.0070833)^48 ] / [ (1 + 0.0070833)^48 – 1 ]
M = 20,000 [ 0.0070833 * 1.4034 ] / [ 1.4034 – 1 ]
M = 20,000 [ 0.009939 ] / [ 0.4034 ]
M = 20,000 * 0.024638
M = $492.76
Final Result
Your new monthly used car payment will be $492.76.

Frequently Asked Questions (FAQ)

Are interest rates always higher for used cars?

Yes, almost always. Lenders see used cars as higher risk than new cars because they have already depreciated and may have unknown mechanical issues. The older the car and the higher the mileage, the higher the interest rate you can typically expect, even with a good credit score.

What is a typical loan term for a used car?

Terms for used cars are generally shorter than for new cars. While 3 to 5 years (36-60 months) is most common, some lenders may not offer terms longer than 4 years for cars over a certain age (e.g., 5+ years old) or mileage (e.g., 75,000+ miles).

Does the car’s mileage or age affect the loan?

Absolutely. Many lenders have specific rules. They may not finance a car that is over 10 years old or has over 120,000 miles. If they do, they will almost certainly charge a significantly higher interest rate and require a shorter loan term to limit their risk.

How do I find the loan amount for a private sale?

First, agree on a price with the seller. Then, contact your bank or credit union for a loan. They will likely ask for the car’s Vehicle Identification Number (VIN) to check its value (using NADA or KBB). They will then tell you the maximum amount they are willing to lend for that specific car, which may be less than your agreed-upon price. The “Loan Amount (P)” you enter here is the amount you are *financing*, not the car’s price.

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