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How much will I pay in interest on my car loan?
Is there a way to calculate how much I’ll pay in interest on my car loan? I want to compare loans based on how much they cost, but I don’t know how to figure out the total interest charges.
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
You can
calculate the interest by hand
using this formula:
Total Interest = (loan principal x interest rate) x years in loan termSo, if you have a 36-month loan for $20,000 with a 5% interest rate, your equation will look like this:
Total Interest = (20,000 x 0.05) x 3 = $3,000 paid in interest.
If you’d prefer, you can also use Microsoft Excel or Google Sheets to figure out how much you’ll pay for your car loan. Simply open a blank spreadsheet and type the following formula into a blank cell:
=CUMIPMT(yearly interest rate/12, duration of the loan in months, the loan amount before fees and interest, 1, the total number of payments you will make, 1)
Next, add in all of the numbers that are specific to your loan. If you have the same 36-month loan for $20,000 with a 5% interest rate, the equation would look like this:
=CUMIPMT(0.05/12, 36, $20,000, 1, 36, 1)
If all of the information that you provide is correct, the result should be the total interest!
While you’re looking for the best rates on your car loan, why not shop for better insurance rates, too? It’s easy when you use the
Jerry
app. Just download the app and answer some quick questions to see your policy options in a comprehensive list. When you find a quote you like, Jerry can help you cancel your old policy and sign up.View full answer
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