How Does the Auto Loan Calculator Work?

The auto loan calculator is used to finance a new or used vehicle, simplifying the complex financial aspects of car loans. The auto loan calculator is designed to paint a clear picture of the costs associated with buying a new vehicle, helping ensure affordability so many can better outline their budgets.

Need help with down payment? Consider our down payment calculator.

Why Use the Auto Loan Calculator?

The auto loan calculator serves as a crucial tool for many who are considering financing a vehicle. It provides a simple breakdown of potential loans, giving people the ability to assess affordability and make informed decisions for themselves. By entering variables such as loan amount, interest rate, and loan term, you can calculate monthly payments and total interest costs. This information offers options considering financial circumstances, ensuring repayment plans. Ultimately, using the auto loan calculator promotes financial responsibility, helping people through the tedious process of financing vehicles.

A Brief History of Banks

Banks have been a fundamental part of society since ancient times. Early banking began almost four millennia ago around 2,000 B.C. in Mesopotamia, temples were used as repositories for valuables, and records of transactions were kept. Later Greek and Roman civilizations adopted basic banking systems, the first modern bank was erected during the Renaissance in Italy. The Medici family built the first bank in the year 1397 in the city of Florence Italy. The rise of central banks was seen in the 17th century, for example, the Bank of England in 1694, to structure national finances. During the 20th century in the Great Depression, financial regulations like the Glass-Steagall Act of 1932 in the United States, allowed banks of the Federal Reserve to lend to five or more Federal Reserve system members or any individual member bank with a capital stock not exceeding five million dollars, against collateral. This forced commercial banks to refrain from investment activities and protect depositors from losses. Banks still play key roles in economies around the world, giving many financial institutions the ability to grow their economies.

Input Fields Explained

• Vehicle price($): This is the total cost of the vehicle.
• Down payment($): Enter the amount for the down payment.
• Interest rate(%): Please enter the annual interest rate for your given loan.
• Loan term(months/years): Fill in the duration of the loan whether it's years(y) or months(m).

Understanding the Results

Once the required fields have been entered and the "Calculate" button has been clicked, the auto loan calculator will provide an answer. Below a helpful example and demonstration of how the auto loan calculator functions will be shown!

Example:

• Vehicle price ($40,000)
• Down payment ($10,000)
• Interest rate (9%)
• Loan term (96 months)

= $527.41 monthly payments