Auto Loan Calculator
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Use an auto loan calculator to determine your monthly repayment costs
Have you either saved for your down payment or know how much the trade in value is for your present car? You know that you need an auto loan and have found a very good deal but are not sure how much it will cost you every month to buy that car you have been eyeing up on the forecourt? The best way to determine the monthly repayments that purchasing the car would entail is to use an auto loan calculator.
There are a myriad of web sites that offer you the free use of an auto loan calculator. Simply type in auto loan calculator into any search engine and you will be provided with dozens of options to choose from in a matter of seconds. Of course, they will all vary slightly but their one aim is to determine just how much your monthly repayments would be if you took out an auto loan.Most auto loan calculators require the following information:
This is the sticker price of the car you want minus any down payment or trade in value you have on your present auto.
This means the length of the loan required in years or months. The longer you make the loan the more interest you pay but the lower your monthly repayments will be.
This is the interest rate of the loan you have chosen – for example 5% APR.
Once you have typed in the above information into the auto loan calculator, it will automatically calculate what the monthly repayments will be. Of course, you can play around until your heart is contented with the car loan interest rate and term of the loan until you produce a monthly repayment figure that is suitable for you. However, you must be realistic in the interest rate and only use a figure that is readily available to you. It's no use typing in 1% if you know that you cannot possibly get a loan with a 1% interest rate!
Some auto loan calculators will also provide you with an amortization schedule. This schedule shows you that just how much of the monthly payment you are making is a capital repayment and just how much of it is an interest repayment. It will also illustrate how the capital payments for the original amount borrowed increases as the interest payments decrease over time.
All in all, an auto loan calculator can prove to be a very useful tool in illustrating just how much it would cost you on a monthly basis to purchase the car you are interested in. If the monthly repayments are too expensive and do not fit into your budgeted expenditure do not enter into the purchase. The last thing you want is to be lumbered with a new car loan that you cannot afford to repay. Trust what the auto loan calculator tells you and if you can't afford it – don't do it!