How do I calculate the interest on my car loan?

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?

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 Jerry 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!
Eric Schad
Answered on Nov 22, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.

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