Car Loan Calculator

Created by Arunangshu DasReviewed Nov 14, 2026

Calculate a car loan's monthly payment, total interest and the effect of a balloon payment.

Enter the price, the deposit, the annual rate, the term in months and any balloon. Taxes, fees and insurance are not included.

Monthly payment, balloon and total cost

Enter the price, deposit, loan terms and balloon or load the worked example.

The schedule ends on the balloon: the balance after the last monthly payment is the lump sum then due, and nothing is modelled after it. Whether you pay it, refinance it or hand the vehicle back depends on your agreement and is not part of this calculation. The rate is nominal, charged at one twelfth each month on the balance still owed, with payments at the end of each month. Interest is rounded to 0.01 each month. Taxes, registration, insurance, fees, the vehicle's future value and any mileage or condition charges are not included.

Learn what a balloon does to a car loan

Follow the payment formula and see why a lower payment can mean more interest.

Read the car loan guide

Formula and methodology

Loan P = price − deposit; payment = (P − B ÷ (1 + r)^n) × r ÷ (1 − (1 + r)^−n), with r = annual rate ÷ 12 ÷ 100 and B the balloon.

Loan = price − deposit. The payment is the level amount that brings the balance down to the balloon after the last month, with the annual rate divided by 12, and is the smallest payment in steps of 0.01 whose month-by-month ledger gets there. Interest is charged each month on the whole balance still owed, including the balloon. The calculator also works out the same loan with no balloon and shows the difference in payment and in interest.

Definitions

A car loan finances the vehicle price less what you pay upfront. The deposit, or down payment, is that upfront amount: cash plus any credit for a trade-in. The loan is repaid by level monthly payments of principal and interest. A balloon payment, also called a residual or an optional final payment, is a lump sum left unpaid until the end of the term; the monthly payments repay only the rest.

Verified worked examples

A 30,000 vehicle with 6,000 down leaves a 24,000 loan. At 7.5% a year over 60 months with an 8,000 balloon, the mathematical payment is 370.607, so the payment is 370.61. In month 1 interest is 150.00 and 220.61 reduces the balance. The 60th payment is 370.43 and leaves exactly 8,000 owing. Total interest is 6,236.42; monthly payments plus the balloon come to 30,236.42, and 36,236.42 with the deposit. With no balloon the payment would be 480.92 and the interest 4,854.53, so the balloon lowers the payment by 110.31 and adds 1,381.89 of interest.

Interpretation

A balloon lowers the monthly payment because less principal is repaid each month. It raises the total interest because the balance stays higher for the whole term. It also leaves a debt at the end: compare the balloon with what the vehicle may then be worth, which the calculator does not estimate. A larger deposit lowers both the payment and the interest.

Inputs and interpretation

Enter the vehicle price being financed, the deposit as one amount (0 if none), the annual rate on the reducing balance, the term in whole months and the balloon as an amount (0 if none). If the balloon is quoted as a percentage, work out the amount first. If taxes or fees are financed, include them in the price. Choose a market for number formatting only.

Assumptions and limitations

A fixed nominal annual rate charged at one twelfth each month, equal model months, payments at the end of each month starting one month after the loan is drawn, and the balloon due together with the last monthly payment. Interest is rounded half up to 0.01 each month. There are no fees, taxes, insurance, payment holidays or early repayment, and nothing is assumed about the vehicle's value.

Supported domain and common mistakes

Prices above 0 up to 1 trillion, deposits from 0 to below the price and balloons from 0 to below the loan, each with at most 2 decimal places; annual rates from 0% to 100%; terms from 1 to 120 whole months. The calculator does not model a lease, a hand-back option, mileage or condition charges, sales tax or registration rules, a trade-in with money still owed on it, or a lender's own rounding and day count.

Do not compare offers on the monthly payment alone: a balloon or a longer term lowers it while raising the interest. Do not forget that the balloon is still owed at the end. Do not enter the balloon or the deposit as a percentage. Do not treat a trade-in with an outstanding loan as a full deposit; only the amount left after that loan is cleared reduces what you borrow.

Frequently asked questions

How is the monthly car loan payment calculated?

The loan is the price less the deposit. With monthly rate r, n months, loan P and balloon B, payment = (P − B ÷ (1 + r)^n) × r ÷ (1 − (1 + r)^−n). The calculator then rounds to the smallest payment in 0.01 steps that brings the balance down to the balloon, and the last monthly payment settles the difference.

What does a balloon payment do to the cost?

It lowers the monthly payment and raises the total interest. On a 24,000 loan at 7.5% over 60 months, an 8,000 balloon cuts the payment from 480.92 to 370.61 and lifts the interest from 4,854.53 to 6,236.42, and 8,000 is still owed at the end.

Is interest charged on the balloon?

Yes. The balloon is part of the balance for the whole term, so interest is charged on it every month. In the example, the first month's interest is 150.00 on the full 24,000 whether or not there is a balloon.

How do I enter a trade-in?

Add the credit you receive for the trade-in to your cash deposit and enter the total. If you still owe money on the trade-in, use only what is left after that loan is cleared. If you owe more than the trade-in is worth, the shortfall is usually added to the new loan, which this calculator does not model separately.

What happens at the end of the term?

The schedule ends with the balloon owing. You would pay it, refinance it or, under some agreements, return the vehicle instead. Which options exist depends on your contract. The calculator stops at the balloon and assumes nothing about the vehicle's value.

Does a longer term cost more?

Usually, yes. The same 24,000 with the 8,000 balloon over 72 months instead of 60 lowers the payment from 370.61 to 326.65 and raises the interest from 6,236.42 to 7,518.09.

Sources and educational scope

Educational arithmetic for a fixed-rate car loan with level payments and an optional balloon. It is not a finance offer, an eligibility or affordability assessment, a valuation of any vehicle, a regulated disclosure or financial advice. A lender's own rounding, day count, fees and conventions will differ; rely on the lender's documents.

Reviewed 2026-11-14. AI-assisted content under operator editorial responsibility. No independent expert financial review is claimed.