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As with other types of loans, the overall cost of a car loan comes down to one major factor: the annual percentage rate. The APR includes both interest and lender fees, expressed as a percentage.
Auto loans usually come with shorter terms than personal or home equity loans, and your credit score will play a key role in how high or low your offered rate is. How to calculate total loan costs
An amortization calculator is used to determine the periodic payment amount due on a loan (typically a mortgage), based on the amortization process. [ 1 ] The amortization repayment model factors varying amounts of both interest and principal into every installment, though the total amount of each payment is the same.
Larger loans, like mortgages, personal loans and most auto loans, have an amortization schedule. With both simple and amortized interest loans, payments remain the same over the life of the loan.
The formula for EMI (in arrears) is: [2] = (+) or, equivalently, = (+) (+) Where: P is the principal amount borrowed, A is the periodic amortization payment, r is the annual interest rate divided by 100 (annual interest rate also divided by 12 in case of monthly installments), and n is the total number of payments (for a 30-year loan with monthly payments n = 30 × 12 = 360).
The calculations for an amortizing loan are those of an annuity using the time value of money formulas and can be done using an amortization calculator. An amortizing loan should be contrasted with a bullet loan, where a large portion of the loan will be paid at the final maturity date instead of being paid down gradually over the loan's life.