Getting a car loan can be difficult to wrap your head around, particularly if you aren’t really sure about how much it is really going to cost you in the long run. The amount of money you are borrowing up front is easy to figure out, but once you factor in different interest rates, the term of your loan, and the repayment frequency, your loan can end up costing a lot more than you think.
I want to have a look at some figures to show you how these variables can affect both your monthly repayments. Unfortunately if you have bad credit, you might be looking at a car loan with higher interest if your lender considers you to be a higher risk, so I have included a wide range of interest rates.
This table shows years across the top, and the interest rate of your loan going down. Match up the two figures to find how much you will be paying each month.
Monthly repayments - $5000 loan
| 1 | 2 | 3 | 4 | 5 | |
|---|---|---|---|---|---|
| 6% | 430 | 221 | 152 | 117 | 96 |
| 7% | 432 | 223 | 154 | 119 | 99 |
| 8% | 434 | 226 | 156 | 122 | 101 |
| 9% | 437 | 228 | 159 | 124 | 103 |
| 10% | 439 | 230 | 161 | 126 | 106 |
You can get a more precise figure with this calculator, which is really designed for mortgages, but the principle is exactly the same. Fill in the blanks, and you will be able to see what your monthly repayments would be on your car loan.
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