How do I calculate APR on my car loan?

I'm trying to organize my finances for my future and would like to figure out my APR. However, I don't understand how it's determined. How do I calculate my APR on my car loan?

Answer
APR, also known as the annual percentage rate, is determined by your interest rate, loan amount, duration of your loan, and any additional fees.
There are a couple of ways to calculate APR; one of the easiest ways is to get help from an Excel or spreadsheet program.
To do this, determine the =RATE(your loan information)*12
RATE can usually be found under financial in the spreadsheet functions.
Your loan information that goes in the parenthesis is:
  • The months of your loan term
  • Estimated monthly payments (as a negative number)
  • Value of the loan minus fees (do not include commas)
Let’s say you take out a 72-month loan for $26,000, and your monthly payment is $440.
You will write into the cell on your spreadsheet: =RATE(72,-440,26000)*12.
The answer is 0.067 or about 6%.
This number won’t be the same for everyone’s 72-month $26,000 car loan because APR is also determined by credit scores, credit history, and any additional lender fees added in. Because of this, this number is an estimate to help you determine how much to expect.
Talk to your lender to ask more about APR and how they determine it for you. If your APR is too high or you want to make changes to your car loan to save money, the best way is through refinancing. You can refinance through the Jerry app. Car owners pay $85 less every month by refinancing their auto loans.
Lauren Smith
Answered on Jan 06, 2022
Lauren has written for World Nomads, the Matador Network, Korvia Consulting, and once upon a time Three Fates Games. She graduated from Columbia College of Chicago with a BFA in Creative Writing. After graduating, she moved overseas and lived in South Korea where she spent her free time traveling and going on road trips with friends. She misses the rest stop potatoes and is trying to figure out how to recreate them at home. She's now based outside of Chicago and when she's not writing she spends her free time reading, playing video games, and exploring whenever she can.
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