Car Loan Payment Tools

Created By : Veerendra
Reviewed By : Rajashekhar Valipishetty
Last Updated at : Apr 18,2023

Car Loan Payment Tools is a user-friendly tool that displays the monthly and actual loan amount in a fraction of seconds. The only thing you have to do is enter car price, sales tax, down payment, trade-in value, loan tenure and interest rate details to get the EMI and loan amount as result easily.

Car Price:$
Sales Tax:%
Down Payment:$
Trade in Value:$
Interest Rate:%
Loan Term(months):
Monthly Payment($):

Car Loan Payment Tools with Trade-in Value: Determine the monthly car loan payment value by using the free Car Loan Tools. Continue reading to know about what is the car loan payment formula, what are the terms included in the car loan system. Check the step by step process to find the car loan monthly payment and total loan amount with real-time examples.

Steps to Calculate Car Loan Payment Amount

Get the detailed steps to calculate the monthly car loan payment amount with down payment and trade-in value from the following section.

  • Obtain the car price, sales tax, down payment, trade-in value, loan term and interest rate.
  • Subtract car price from the down payment.
  • Again subtract the trade-in value from the result to get the loan amount.
  • Substitute the values in the car loan formula.
  • Process the equation to get the monthly payment amount.
  • Multiply the monthly loan amount with the loan term to get the actual loan amount.

Car Loan Payment Calculation with Trade-in Value

The parameters of the car loan payment calculator are listed here with an explanation.

  • Car Price: The total cost of the car without any adjustments
  • Car Loan Term: The number of months or years you will take to pay back the loan.
  • Sales Tax: How much tax you will be charged on this car price.
  • Down Payment: The amount of cash you will be able to put toward this purchase and not borrow in the loan.
  • Interest Rate: The annual stated rate of your loan.

The monthly payment present value equation for PMT is given here:

PMT = PV x i x [(1+i)n/((1+i)n-1)]


PV is the actual loan amount

i is the rate of interest

n is the loan term


David has bought a car with $25,000 on loan and he paid $5000 as down payment. The sales tax is 7%, trade-in value is $4500, loan term is 60 months and interest rate is 4.5%. Find the monthly payment amount?


Given that,

Car price = $25,000

Sales tax = 7%

Down payment = $5000

Trade-in value = $4500

Loan term n = 60 months

Interest rate i = 4.5%

The amount you need to take as loan = ($25,000 - $5,000) - $45,000 = $15,500

The loan amount = $15,500

The monthly payment formula is PMT = PV x i x [(1+i)n/((1+i)n-1)]

PMT = 15,500 x 0.375 x [(1+0.375)60/((1+0.375)60-1)]

= $321.59

Actual loan amount = $17,250

How to Find Car Loan Amount Tools?

  • Give the required inputs i.e car price, down payment, trade in value, sales tax, interest rate and loan term.
  • Click on the calculate button.
  • The monthly car loan payment amount and total loan amount will appear.

Arithmetic Toolss has got concepts like finance, trigonometry, arithmetic, math and many more along with their relevant calculators all one under one roof.

FAQ's on Car Loan Payment Tools

1. What is the formula for calculating a car loan payment?

The formula to calculate a car loan payment is Monthly Payment = PV x i x [(1+i)n/((1+i)n-1)]

2. How does the loan term affect the interest rate amount?

You need to realise that your interest rate is not the only factor that determines the total amount of interest to be paid on your loan. Your car loan tenure plays an important role in determining the interest amount you repay the lender. As a general rule, for the same interest rate, the longer duration, the higher are the interest repayments.

3. Is it cheaper to pay off a car loan early?

If you make a monthly payment on the car loan, you are paying both principal and interest. Based on the terms of the loan contract, you might pay less interest if you pay off your principal early.

4. How is the down payment on a car calculated?

Multiply the total amount by the percentage required by the lender minus the value of any trade-in to get the down payment amount.