Car loan calculators are widely available online as a way to understand exactly how the amortization of your loan will look over time. Understanding the payoff on your loan can help you better understand how small changes in your loan rate can make a difference in the payoff value of the loan. Personal loan calculator sites are available that allow you to enter a loan amount, the term of the loan, the interest rate, and any additional payments you may make over time, and allow the site to calculate the monthly payments; broken into principal and interest payments. The interest payments are how much of your payment each month will be going to paying interest on the loan amount. Therefore, if you add all of the interest payments for each month up, you will get the total interest required for the car.
You can also calculate the interest on a loan yourself by using the formula Interest = Principal Amount x Interest Rate x Time. You can then use this figure to check against the loan calculator on the website. Make sure that each of the payments are equal to one another as in most cases, car loans are simple interest loans. However, it is possible to have a compounding interest loan as well. Compound interest loans charge interest on the principal over time, even as it is paid off. Thus it is important to understand what your lender is offering and how the personal loan calculator site is calculating the loan before you make any decisions.
