If you're thinking about financing a car, this calculator offers monthly payment and overall cost estimates at a variety of rates and loan terms.
When comparing loans from different lenders, make sure you can answer the following questions:
- Is the quoted rate the Annual Percentage Rate (APR)? The term APR has legal meanings under the Truth in Lending Act and is the best way to compare loan offers.
- Are there other fees, such as a "loan origination" fee? These fees could be due at closing or the could be added to your monthly payment - making it higher than you would expect.
- Are there any penalties for paying off the loan early or paying more than the required monthly payment?
- What are the situations in which the interest rate could be raised?
- Is the interest rate fixed or variable? Most auto loans have a fixed rate, so the loan payments don't change. A variable rate loan may have a lower payment, but the payment could go up if interest rates rise.