# How much would a \$20,000 car loan cost each month?

I need to get a \$20,000 car loan but I don’t know how much it would cost me each month. I want to make sure that I’ll be able to afford it before I commit to the loan.

Liz Jenson · Answered on Dec 14, 2021
Reviewed by Shannon Martin, Licensed Insurance Agent.
The monthly cost of a \$20,000 car loan will depend on two things: your repayment period and the APR. Assuming that you take out a 48-month loan and are given the average APR of 4.09%, you would pay **\$452 per month before sales tax.
Changing these factors could have a big effect on your monthly payment. If you choose a loan term of 72 months, for example, your monthly payment drops to \$316.
If you want a more exact figure, you should talk to some lenders and gather quotes. That way, you’ll be able to compare rates and calculate your exact monthly payment using the lowest APR offered to you. There are loan payment calculators online that you can use, or you can use this formula:
Payment amount = P (r (1+r)^n) / ( (1+r)^n -1 )
In this case:
• P = Initial principal or loan amount (in this example, \$10,000)
• r = Interest rate per period (in our example, that’s 7.5% divided by 12 months)
• n = Total number of payments, or the term length of your loan
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