Every automobile purchase that is financed involves several decisions regarding the loan amount, duration of the loan, and the size of the repayment installments. Beyond the decisions of choosing the right brand, model and color for one s own car, the number crunching that accompanies the choice of a loan is difficult for most people. Auto loan calculators make this task simpler.
Auto loan calculators consider all the inputs that are required to calculate the equated monthly installments. These include the retail price of the car, the interest rate being offered, the duration of the loan, the down payment, the sales tax, and the available rebates, among others. Using online auto loan calculators, the entire process becomes as simple as entering the retail price of the vehicle, the prevalent interest rate and the duration of the loan to calculate the estimated monthly payment. For example, a car worth $20,000 at a sales tax and interest rate of 8% and a down payment of $5,000 can be bought by paying 24 monthly installments of $887 or 60 monthly installments of $398.
Today, a host of companies provide free auto loan calculators on the web. Before choosing a loan or talking to a lender, it is always advisable to work out the math on these calculators. Web sites like Autosite.com and Bankrate.com are two of the reputed web sites that provide online provide auto loan calculators. Within a matter of minutes, you can calculate the monthly installment that is to be paid. However, it is important to do a bit of homework. This includes finding out the price of the car, the prevalent sales tax and the interest rate. It is also important to ensure that you enter the correct figures in the loan calculator.
Some auto loan calculators also calculate the maximum amount of loan amount that you are eligible for based on your present income. So the next time you decide to purchase a vehicle, it might be a good idea to use an auto loan calculator to find out the maximum you can afford to spend before stepping into a car dealers showroom and getting swept away with pressured sales talk.