I can see the interest on my car loan statement, but I'm not sure how the bank figures it out. How can I calculate car loan interest so I can understand why I’m paying what I am?
Reviewed by Shannon Martin, Licensed Insurance Agent.
Great question! While you could get into algebraic formulas and compound interest, just do it the easy way: use an online car loan calculator and amortization schedule.
Just enter your loan length, interest rate, and principal (loan amount) and click calculate. This will show you how much interest you pay over the life of the loan, as well as your monthly payment.
If you want a further breakdown, find a calculator with an amortization schedule, which shows you how much you pay each month toward principal and interest.
If you’re shopping around for car loan rates, consider doing the same for your car insurance. To do this easily, check out the
app—we’ll get you personalized quotes from top-of-the-line providers, so that all you need to do is choose the plan that works best for you. And once you find one, we’ll even help you switch!
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