Score: 4.8/5 (50 votes)

Your new loan amount would be $25,000, your **monthly payment would be $452**, and you'd pay $2,113 in total interest charges.

A good rule of thumb for a down payment on a new car loan is **20% of the purchase price**. A down payment of 20% or more is a way to avoid being “upside down” on your car loan (owing more on the car than it's worth).

For instance, using our loan calculator, if you buy a $20,000 vehicle at 5% APR for 60 months the **monthly payment would be $377.42** and you would pay $2,645.48 in interest.

A $30,000 car, roughly **$600 a month**.

Your new loan amount would be $25,000, your monthly payment would be **$452**, and you'd pay $2,113 in total interest charges.

The monthly payment on a $25,000 loan ranges from **$342 to $2,512**, depending on the APR and how long the loan lasts. For example, if you take out a $25,000 loan for one year with an APR of 36%, your monthly payment will be $2,512.

**The average new car payment in America has crept above the $500 per month mark for the fist time**, settling in at $503, according to a recent study by Experian. And if that weren't bad enough, the average length of a car loan now stands at 68 months.

Using the formula above, you can estimate your monthly payment for various loan terms to be: **12 months: $1269.25**. **24 months: $643.99**. **36 months: $435.49**.

Having a 700 credit score puts you in the “prime” category for borrowing. According to Experian, the average rates for this category are **3.51% for new-car loans and 5.38% for used-car loans**.

In general, lenders look for borrowers in the prime range or better, so you will need a score of **661 or higher** to qualify for most conventional car loans.

It can't be stopped but making a large down payment gives you a cushion between the value of the car and the amount you owe on the loan. **If your loan amount is higher than the value of your vehicle, you're in a negative equity position, which can hurt your chances of using your car's value down the road**.

According to experts, a car payment is too high if the car payment is **more than 30% of your total income**. Remember, the car payment isn't your only car expense! Make sure to consider fuel and maintenance expenses. Make sure your car payment does not exceed 15%-20% of your total income.

**Paying off a car loan early can save you money — provided there aren't added fees and you don't have other debt**. Even a few extra payments can go a long way to reducing your costs. Keep your financial situation, monthly goals and the cost of the debt in mind and do your research to determine the best strategy for you.

Answer provided by. While your friend is right that your credit score is considered fair, that doesn't mean securing an auto loan is impossible! With a 640 credit score, a new car loan interest rate hovers around 6.5% and a used car loan sits at about 10.5%. **A credit score of 640 is below the national average of 710**.

70% of U.S. consumers' FICO^{®} Scores are higher than 660. What's more, your score of 660 is **very close to the Good credit score range of 670-739**. With some work, you may be able to reach (and even exceed) that score range, which could mean access to a greater range of credit and loans, at better interest rates.

Your monthly payments would look like this for a $40,000 loan: **36 months: $1,146**. 48 months: $885. 60 months: $737.

“A typical down payment is usually **between 10% and 20% of the total price**. On a $12,000 car loan, that would be between $1,200 and $2,400. When it comes to the down payment, the more you put down, the better off you will be in the long run because this reduces the amount you will pay for the car in the end.

The monthly payment on a $30,000 loan ranges from **$410 to $3,014**, depending on the APR and how long the loan lasts. For example, if you take out a $30,000 loan for one year with an APR of 36%, your monthly payment will be $3,014.

The average monthly car payment was **$644 for a new vehicle and $488 for used vehicles** in the U.S. during the fourth quarter of 2021, according to Experian data. The average lease payment was $531 a month in the same period.

The result is that **the car will be a lot more expensive in the end**. In the example we've given, a car payment of $400 per month for five years (60 months) equates to $24,000. But the same $400 per month spread out over six years (72 months) is $28,800, while it's $33,600 over seven years (84 months).

Expert estimates range broadly. Greg McBride, a senior vice president, chief financial analyst at Bankrate.com, advises that a car payment should equal **no more than 15 percent of your pretax monthly pay**. That means that if you make $50,000 a year, your monthly car payment could be as much as $625.

Most lenders that offer personal loans of $25,000 or more **require fair credit or better for approval, along with enough income to afford the monthly payments**. Other common loan requirements include being at least 18 years old; being a U.S. citizen, permanent resident or visa holder; and having a valid bank account.

To calculate your monthly car loan payment by hand, **divide the total loan and interest amount by the loan term** (the number of months you have to repay the loan). For example, the total interest on a $30,000, 60-month loan at 4% would be $3,150.

- a: $100,000, the amount of the loan.
- r: 0.005 (6% annual rate—expressed as 0.06—divided by 12 monthly payments per year)
- n: 360 (12 monthly payments per year times 30 years)

**No, paying off your car doesn't reduce your insurance rates**, but it does give you more control over the type and amount of coverage you have, which can help you save money on your insurance rates.