How do you calculate APR interest on a car loan?
I’m trying to pay my car loan off and I noticed my monthly payments are higher than expected. I want to know how to calculate APR interest on a car loan so that I can see if I need to look into refinancing or not.
The simple answer is to divide the total loan and interest amount by the loan term.
APR is more complicated than that, though. APR includes all the fees of your loan rolled into the principal balance, so it requires some specific calculations. To calculate APR, add all of the fees and interest that you will have to pay during the loan, and then do the following:
- Divide the total from your fees and interest by the amount of the loan.
- Take the result and divide it by the number of days in the loan term.
- Now, multiply the resulting number by 365.
- Multiply the result by 100 to get the percentage rate.
If you have done the calculations correctly, you should end up with your APR as a result.
APR is what determines how much interest you pay over the life of your loan. If you feel like you’re paying too much, try refinancing your loan to get a lower rate.
Try using the Jerry app to help you find the best deals. Jerry is a great resource for comparing loan options from multiple lenders. Use our refinance calculator and avoid the hassle of searching for lenders yourself. Jerry makes it easy by finding the best lenders at the best rates. On average, car owners pay $85 less every month by refinancing their auto loan.
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