Car Loan Calculator With Extra Payment

See how extra payments can save you thousands in interest and years of payments.

Enter your loan details below to get started.

Calculation Methodology

Understanding how the calculator works

Monthly Payment Formula

The standard monthly payment is calculated using the following formula:

M = P × [r(1 + r)^n] / [(1 + r)^n - 1]

Where: M = Monthly payment, P = Principal (loan amount), r = Monthly interest rate (annual rate / 12), n = Total number of payments (years × 12)

Interest & Principal Split

For each payment:

Interest = Current Balance × Monthly Interest Rate
Principal = Monthly Payment - Interest
New Balance = Previous Balance - Principal

Extra Payments Impact

Extra payments are applied directly to the principal balance, which:

  • Reduces the remaining balance faster
  • Decreases future interest charges (calculated on lower balance)
  • Shortens the overall loan term
  • Can save thousands in interest over the loan lifetime

Payment Frequencies

Different payment frequencies are normalized to monthly equivalents:

  • Monthly: Applied once per month
  • Bi-weekly: ~2.17 payments per month (26 payments / 12 months)
  • Annually: Applied once per year (on anniversary month)

References

  • Standard amortization formula from financial mathematics
  • Consumer Financial Protection Bureau (CFPB) loan calculation guidelines
  • Federal Reserve interest rate calculation standards

Note: This calculator provides estimates based on standard amortization formulas. Actual loan terms may vary based on lender policies, payment dates, and other factors. Always consult with your lender for exact figures.