PriceProtect™
DriveShield™
GarageGuard™
Services
Insurance
Car Insurance
Compare Car Insurance with Jerry
Jerry’s Expert Advice
Car Insurance Estimates
Home & Renters Insurance
Renters Insurance
Loans
Car Loan
Compare Car Loans with Jerry
Jerry's Expert Advice
Car Loan Guides
Repairs
Car Repair Estimates
Repair Estimates for Popular Services
Advice
Read Car Content
Browse Jerry Car Advice
Check Out Expert Car QnA
Learn About How We Create Content
Jerry Data & Research
How do I calculate the interest on a car loan?
I want to know exactly how much I'm paying in interest. Can you help me out?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
If you want to calculate the interest on a car loan, the easiest way to do so is to hop online. Typing “car loan calculator” or “car loan interest calculator” into a search engine should turn up a list of sites that can do all the math for you and present it in a readable fashion.
If you want to understand how much interest you’re paying, you might want to calculate the amount on your own. To do this, take the amount of principal you owe (this will vary as you pay down the loan), multiply it by the interest rate in decimal format (so five percent = .05), and divide that figure by the number of payments per year. (The interest rate is annualized, so the number of payments also has to be annualized [12]). Here’s an example:
- Loan principal = $20,000
- Interest rate = .05%
- Term = 60 months, with 12 payments per year
- Interest cost = ($20,000*.05)/12 = $83.33
Keep in mind that after each payment, your principal will go down, so you’ll pay less interest each month and pay more toward the principal.
View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
Join 4M+ members in lowering their car insurance
You Might Also Be Interested
Read Advice From Car Experts At Jerry
What Others Are Asking
Browse More Content
Insurance in Your State
Easiest way to compare and buy car insurance
No long forms
No spam or unwanted phone calls
Quotes from top insurance companies
