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Auto Loan Payment Calculator

An Auto Loan calculator helps you understand the periodic cash flow outflows in the form of equal installments for your Auto Loans.

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The formula for calculating Auto Loan payment is as per below:

/

Wherein,

  • L is the loan amount
  • r is the rate of interest per annum
  • n is the number of periods or frequency wherein the loan amount is to be paid

About Auto Loan Calculator

Purchasing a new car or any two-wheeler vehicle nowadays is mostly financed through the bank as, with time, the prices have been rising, and for most people, it becomes over budget if they spend the entire amount in one go. Therefore, it becomes necessary for the borrower to know what amount of periodical installment he would be paying on the same and what extra amount he would be paying in the form of interest, and whether it's viable for him to pay that much extra. Also, the borrowers can compare the installment amount across terms and money lenders, and whichever suits them best, they will opt for the same.

In the case of an auto loan payment, most of the loans are financed up to 80% or a maximum of up to 90%; there are very few cases where the vehicle purchase is financed fully. In some cases, the bank charges processing fees upfront, or any dealer charges, any rebate available, etc. All these need to be taken into account before calculating the installment amount.

How to Calculate using the Auto Loan Payment Calculator?

One needs to follow the below steps to calculate the monthly installment amounts of auto loans.

  1. First of all, determine the loan amount required. Banks usually provide more loan amounts to those with a good credit score and fewer to those with a lower credit score.

    First, we shall enter the principal amount:

    L = Loan Amount

  2. Multiply the loan amount by a rate of interest.


    LxR

  3. Now, we need to compound the same by rate until the loan period.


    LxRx1

  4. We now need to discount the above result obtained in step 3 by the following:


    LxRx2

  5. After entering the above formula in excel, we shall obtain periodically for Auto Loan installments.

Auto Loan Calculator

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Conclusion

Auto Loan Payment Calculator nowadays is quite common these days since it makes it comfortable for the borrower to pay for the vehicle without any large outgo. The higher the credit score, the higher the loan amount and the lesser the down payment the borrower would be required to make.