Car Loan Calculator – Compare Two Offers & Balloon Payment

A $45,000 car with $9,000 down at 6.35% over 60 months costs $701.85 a month

A car loan splits the amount financed, which is the vehicle price minus the down payment, over a fixed number of months. Here $45,000 − $9,000 leaves $36,000 to finance. At 6.35% for 60 months you pay $701.85 a month, total interest is $6,111.37, and everything you spend, down payment included, comes to $51,111.37. The 6.35% is the average new-vehicle rate Experian reported for Q2 2026.

Leaving 30% of the price ($13,500) as a balloon lowers the monthly payment to $510.10, which is $191.75 less. The last installment then jumps to $14,009.86, and total interest grows by $1,994.39 to $8,105.76. The calculator above puts two offers side by side and compares the monthly payment, last payment, interest and total spent.

When it pays to run the numbers first

• You have two quotes: A dealer and a bank or credit union may differ in down payment, term and rate. Enter the second quote as B and compare total spent, not just the monthly payment.
• You are offered a lower payment through a balloon or a long term: The payment looks smaller, but deferred principal is not forgiven. Check the amount due at the end and the extra interest first.
• You are deciding how much to put down: A larger down payment cuts the amount financed and the interest. Keep enough cash for sales tax, registration, insurance and an emergency fund.
• You are choosing between 60, 72 and 84 months: A longer term lowers the payment and raises the interest. The FTC warns that with longer-term financing you could end up owing more than the car is worth.
• You may sell or trade the car before the loan ends: You owe the balance left that month. The balance chart shows what remains after any number of months.

How the calculation works

1. Find the amount financed. Amount financed P = vehicle price − down payment. Interest is charged on this amount, not on the full price.
2. Set the monthly rate. Divide the annual interest rate by 12 (r = rate ÷ 12). At 6.35%, r is about 0.5292% a month.
3. Find the payment. Without a balloon, payment A = P × r ÷ (1 − (1 + r)⁻ⁿ). With a balloon B, A = (P − B ÷ (1 + r)ⁿ) × r ÷ (1 − (1 + r)⁻ⁿ). At 0% interest, A = (P − B) ÷ n. The calculator rounds A to the cent.
4. Split each payment into interest and principal. Each month's interest is the previous balance × r, rounded to the cent. The rest of the payment reduces the balance. The last payment clears the entire remaining balance, balloon included, plus that month's interest, so it can differ from the others by a few cents.
5. Add up the total spent. Total spent = down payment + everything paid on the loan = vehicle price + interest. The last payment already contains that month's installment, so the balloon is not added a second time.

A balloon is principal you push to the last installment

With a balloon, you repay only part of the amount financed in regular installments and settle the rest with the last one. The deferred part keeps accruing interest until then, so at the same rate a bigger balloon means a lower monthly payment and more total interest. The table uses a $45,000 car, $9,000 down, 6.35% and 60 months.

A 50% balloon cuts the payment to $382.26, but after a year you still owe $33,630.72 and interest is $3,324.07 higher than with no balloon. In the UK, the Financial Conduct Authority describes a personal contract purchase (PCP) as a deposit, monthly payments and an optional final “balloon payment”, often called the Guaranteed Minimum Future Value. At the end the customer can return the car, pay the balloon to own it, or use any equity toward a new car. This calculator assumes you pay the balloon; it does not model returning the car, so check the end-of-contract terms and any mileage limits in your agreement.

A longer term lowers the payment and raises the interest

Take $36,000 financed at 6.35%. Moving from 60 to 72 months lowers the payment by $99.26 but adds $1,275.07 in interest. The FTC points out that many creditors offer 72- or 84-month loans, which can lower monthly payments but make the deal more expensive overall. Real offers often charge higher rates for longer terms, which widens the gap.

Compared with 36 months ($1,100.91 a month), the 84-month loan lowers the payment by $568.94 and costs $5,052.73 more in interest. The table assumes $45,000, $9,000 down, 6.35% and no balloon.

A larger down payment cuts both the loan and the interest

A bigger down payment shrinks the amount financed, so the monthly payment and interest both fall. The down payment still counts in total spent because you pay it in cash. The table assumes $45,000, 6.35%, 60 months and no balloon.

Comparing $0 down with 30% down, interest differs by $2,291.71. If you could earn more than that by keeping the cash invested, a smaller down payment can make sense, so compare your savings rate with the loan rate. The lender may also quote a different rate at a different down payment, so ask for the rate again.

Auto loan rates in 2026

There is no single auto loan rate. The figures below are published averages, not offers. Experian publishes quarterly averages from its auto finance data, and the Federal Reserve publishes survey-based rates in its G.19 release.

Experian also reports averages by credit tier. The new-car average for Q2 2026 runs from 4.41% for superprime borrowers (VantageScore 781 and up) to 16.11% for deep subprime borrowers (300 to 500). The table shows what each rate does to a $36,000 loan over 60 months.

The gap between the superprime and deep subprime new-car rates is $207.88 a month and $12,472.69 in interest. The calculator needs the interest rate. The APR is the interest rate plus the loan's additional fees, according to the CFPB, so an APR on your quote can be higher than the plain rate. The FTC adds that the APR you negotiate with the dealer usually includes an amount that compensates the dealer for handling the financing, which is why a pre-approval from a bank or credit union is a useful comparison.

Costs the loan calculation leaves out

The total spent here is the vehicle price plus loan interest. Owning the car costs more.

If you roll taxes, fees or add-ons into the loan, add them to the vehicle price field so the amount financed matches your contract. Adding them again later counts them twice.

Paying off early or selling the car

If you sell the car or pay off the loan before the end, you owe the balance left that month. Two federal rules matter here. Regulation Z, 12 CFR 1026.18(k), requires a statement of whether a charge may be imposed for paying all or part of the principal early, and whether a finance charge rebate applies. For a precomputed consumer loan longer than 61 months, 15 U.S.C. 1615 requires the refund of unearned interest to be at least as favorable as the actuarial method, and it requires the creditor to give a payoff amount within five days of a request. Whether your state or contract adds more rules is not covered here, so read the prepayment line in your contract.

For the 60-month loan above, the balance left after 12 months is $29,682.04. With the 30% balloon it is $32,051.19. A balloon leaves more to pay if you sell halfway through.

Common mistakes

• Comparing only the monthly payment: A lower payment from a balloon or a longer term usually means more interest. Compare total spent.
• Subtracting the balloon from the loan and stopping there: Financing $36,000 with $13,500 deferred is not the same as borrowing $22,500. The deferred amount keeps accruing interest for 60 months.
• Treating the last payment as only the balloon: The last installment includes that month's regular payment. In the 30% example it is $14,009.86, not $13,500.
• Entering the APR when you have the interest rate, or the reverse: The two can differ because the APR includes additional fees. Use the interest rate for the best match with your payment.
• Stretching the term and ignoring negative equity: A long loan can leave you owing more than the car is worth, which the FTC calls negative equity.
• Spending all your cash on the down payment: Sales tax, registration, insurance and an emergency fund still need cash.

Limits

• The calculator uses one fixed annual rate divided by 12 and equal months. Real lenders may count days from the signing date to the first payment, so a payment can differ by a few dollars.
• Variable rates, introductory rates and rates that change partway through cannot be entered as one number.
• Offer B assumes the same vehicle price as A. If two quotes include different discounts or rebates, enter the price after each discount.
• Taxes, fees, add-ons, insurance and prepayment charges are not in the result. Your lender's payment schedule is the final word.

As of The Experian figures, the Federal Reserve G.19 release (October 7, 2026), the CFPB, FTC and CDTFA pages and the cited rules were checked on 2026-10-17. Tax Foundation rates are as of January 1, 2026.

Sources

• 01Experian: State of the Automotive Finance Market, Q2 2026 press releaseAverage new-vehicle rate 6.35%, used 11.19%, average new loan $43,610 (released August 27, 2026)
• 02Experian: Average car loan interest rates by credit scoreNew and used APR by credit tier, VantageScore 4.0, Q2 2026
• 03Federal Reserve: G.19 Consumer Credit, auto loan ratesRelease of October 7, 2026: commercial bank 60- and 72-month new-car rates; finance company new-car rate 6.3%, 67 months (Q2 2026)
• 04CFPB: What is the difference between a loan interest rate and the APR?APR is the interest rate plus additional fees; compare APRs with APRs
• 05CFPB: Regulation Z, 12 CFR 1026.18 (content of disclosures)Paragraph (e) APR, (g) payment schedule, (h) total of payments, (k) prepayment statement
• 06Cornell LII: 15 U.S.C. 1615, prohibition on use of the Rule of 78sRefunds on precomputed consumer loans longer than 61 months; payoff statement within five days
• 07FTC: Financing or leasing a carLonger terms, negative equity, add-ons, dealer APR compensation
• 08CFPB: What is guaranteed asset protection (GAP) insurance?GAP is optional; financing it raises the amount borrowed and interest
• 09Tax Foundation: State and local sales tax rates, 2026As of January 1, 2026: five states without a statewide sales tax; California 7.25% highest state-level rate
• 10California CDTFA: Vehicles tax guide for purchasersTax applies to the total purchase price; rate follows the registration address
• 11UK Financial Conduct Authority: Diagnostic report, motor finance commission arrangementsPCP: deposit, monthly payments, optional final balloon payment (GMFV), end-of-contract options

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