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How do I calculate car loan payments?
I’m going to finance a new Tesla. How do I calculate car loan payments on the vehicle so I can create a budget?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Congratulations on the purchase of your new Tesla! If you’re worried about your monthly payments, relax. Calculating your loan payments doesn’t require an advanced degree in mathematics.
The easiest way to calculate
car loan
payments is to use an online car loan calculator. You can find a car loan calculator on many websites, but the most reputable sites include:- Any bank or credit union website
- NerdWallet
- Bankrate
- Investopedia
Once you choose the site you want, simply input the information in the blanks provided. The calculator will ask for:
- Interest rate
- Length of the car loan in months
- Total principal borrowed, including taxes, fees, and the price of the car after your down payment
After you enter the information, the calculator will provide the monthly payment and the amount of interest you’ll pay over the life of the loan.
If you want to derive the formula by hand to make the idea more concrete, calculate your monthly payment by hand. To calculate by hand, do the following:
- Calculate the interest paid over the life of the loan by visitingJerry’s guide to calculating your car loan payment.
- Add the principal to the total interest paid.
- Divide by the total number of months in your loan.
For example, let’s say you buy a Tesla Model 3 for $40,000 over 72 months at 4% interest. Using the Jerry website, you would determine that your interest paid is $5,058 over the life of the loan. Add that to your principal amount to get $45,058 ($40,000 + $5,058). Next, divide $45,058 by the term (72 months) to get $45,058 ÷ 72 = $625.81. So, your monthly payment is $625.81.
When you get the loan, ask the Tesla rep for an amortization schedule. This document outlines how much of each monthly payment goes to your principal and toward interest, which can put things in perspective.
When you’re ready to buy a Tesla, don’t wait to shop around for insurance. Use the
Jerry
app to compare personalized quotes from the top 50 providers, including Nationwide, Allstate, and Travelers. The average Jerry driver saves $879 a year on car insurance!View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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