Monthly payment on $20,000 by rate and term
| APR | 36 mo | 48 mo | 60 mo | 72 mo | 84 mo |
|---|---|---|---|---|---|
| 3% | $581.62 | $442.69 | $359.37 | $303.87 | $264.27 |
| 4% | $590.48 | $451.58 | $368.33 | $312.90 | $273.38 |
| 5% | $599.42 | $460.59 | $377.42 | $322.10 | $282.68 |
| 6% | $608.44 | $469.70 | $386.66 | $331.46 | $292.17 |
| 7% | $617.54 | $478.92 | $396.02 | $340.98 | $301.85 |
| 8% | $626.73 | $488.26 | $405.53 | $350.66 | $311.72 |
| 9% | $635.99 | $497.70 | $415.17 | $360.51 | $321.78 |
| 10% | $645.34 | $507.25 | $424.94 | $370.52 | $332.02 |
| 12% | $664.29 | $526.68 | $444.89 | $391.00 | $353.05 |
| 15% | $693.31 | $556.61 | $475.80 | $422.90 | $385.94 |
| 18% | $723.05 | $587.50 | $507.87 | $456.16 | $420.36 |
Your rate depends on your credit score, whether the car is new or used, and the lender. Credit unions and pre-approval usually beat dealer financing.
Longer loans cost more
At 7%:
| Term | Monthly payment | Total interest |
|---|---|---|
| 36 months (3 years) | $617.54 | $2,232 |
| 48 months (4 years) | $478.92 | $2,988 |
| 60 months (5 years) | $396.02 | $3,761 |
| 72 months (6 years) | $340.98 | $4,551 |
| 84 months (7 years) | $301.85 | $5,356 |
Stretching to 84 months lowers the payment by $94.17 a month versus 60, but adds $1,594 of interest, and you can owe more than the car is worth for years.
The formula
Payment = Loan × r ÷ (1 − (1 + r)^−n) r = APR ÷ 12, n = months
For $20,000 at 7% over 60 months: r = 0.005833 and the payment is $396.02. A $20,000 loan is the price plus taxes and fees, minus your down payment and trade-in.