Auto Loan Calculator
Auto Loan Calculator

Auto Loan Calculator

Human's mobility has become more sophisticated over the centuries; we have to go far and wide to accomplish one thing or the other. Movements within short distance can be walked, but when it comes to long-distance, then a vehicle is needed. However, moving around in commercial transportation can be too costly, especially when it involves the whole family. Thus, it is necessary to own a car for easy and quick movement. Aside from a necessity, other people see cars as a luxury. Whatever the purpose of wanting a car, Auto Loan is one of the most convenient ways to get one.



What is an Auto Loan?

Saving up to buy a brand new car is a long catch, while saving up, the price of the car may go up, and one will have to save extra. An Auto Loan is a type of loan designed for people who needs a car but can't afford it at the moment. Auto Loan focuses on purchasing cars. Though there are auto lenders that will release fund for borrowers to buy a car of their choice, some will buy the vehicle on behalf of the burrower and give it to the borrower. Then the borrower will make a monthly payment until the worth of the car is fully paid. The next section explains features of Auto Loan.


Features of Auto Loan

You must have been hearing and seeing Auto Loan offers in ads, but the ads are not self-explanatory enough. Below are some highlights and terminologies used in Auto Loan contexts:



  • Principal ; is the exact amount borrowed or the worth of vehicle given to the borrower. E.g., if a borrower takes a $20,000 Auto Loan, or gets a car worth $20,000 on loan, the principal of the loan is $20,000.
  • Interest ; is the amount charged for using the loan. It is also the profit of lenders for lending out their money.
  • Fixed-rate interest ; in this type of Auto Loan, the interest on the amount borrowed to purchase a car remain constant throughout the life of the loan. Fixed-rate interest features simple interest which will be calculated at the beginning of the loan and spread over the term of the loan. For example, if a borrower takes an Auto Loan of $2,500 with an interest of $500 for 10 years, the $500 interest is added to the principal $2,500, making $3000. Then the $3000 will be spread over the 10 years.
  • Variable rate interest ; this is a direct opposite of fixed-rate interest. Variable fluctuates back and forth according to the market interest rate. This type of loan sometimes comes with compound interest, I.e., unpaid interest and principal are added together, and the new total is used to calculate new interest. However, this type of loan gives the privilege to repay as soon as possible. Most of the time, the interest rate emulate the current market situation instead of compound interest.
  • Extra payment ; this feature allows you to make outstanding payment of your loan. Instead of lenders having to charge from your savings or salary, they will charge from your extra payment. Extra payment boosts credit score and also helps to repay the loan quickly. It also helps to prepare for uncertain times where a borrower might not be financially capable of repaying the loan.
  • Comparison rate ; is the complete breakdown of the Auto Loan, i.e., interests, fees, and charges. The comparison rate is a transparent price breakdown you will get from lenders so that you can compare with other prices.
  • Redraw facility ; while repaying your loan, something that requires financial attention might happen unexpectedly. Redraw facility provides the opportunity to collect the money paid into the loan and repay it later. Lenders that offer this feature are rare, and even the terms and conditions attached to it make borrower avoid it.
  • Loan term ; the loan term is the period agreed to complete repaying the loan. Auto Loan terms range from 1 to 15 years.
  • Payment frequency ; this refers to how often the loan will be repaid; it may be weekly, monthly, 3-months, etc.
  • Application fee ; this is the fee you must pay to initiate the Auto Loan process.
  • Ongoing fee ; this fee is also called the maintenance fee. It is paid to keep your loan alive. Don't freak out, the fee is minimal, and you will be required to pay it throughout the term of the loan.
  • Break cost fee ; this fee is peculiar to fixed-rate interest loans. Break cost is the money charged from borrowers who have paid off their loans before the loan term is over.
  • Late payment ; this is opposite to break cost fee. It is an additional fee added when borrowers repay late or skip repayment cycle.


Types of Auto Loan

There are two major types of Auto Loan, which are Secured Auto Loan and Unsecured Auto Loan. None of the two is better the other; each has a unique feature and is designed to suit the different financial situations.

1. Secured Auto Loan ; in this type of loan, you as a borrower must provide security. The security can be a fixed or movable asset, e.g., house, jewelry, land, etc. The asset provided by the borrower will be used as collateral in case the borrower defaults the loan. Usually, the assets provided must worth the car took on loan. The borrower must have official documents certifying the ownership of the provided assets. This type of loan is good for getting expensive cars on loan because lenders quickly agree to this type of loan when they see a worthy asset for security. Another benefit of secured loan is that it always comes with longer term, usually more than 10 years. However, loan defaulters will lose asset to lenders.



2. Unsecured loan ; in contrary to a secured loan, an unsecured loan does not require borrower using his/her asset as security. So, no worry about losing assets to lenders. However, an unsecured loan has many downsides; little principal and a shorter term are the major disadvantages. Heavy persecution for loan defaulters is the main reason why people run away from unsecured Auto Loans.


Benefits of Auto Loan

  • Ownership ; you are already a car owner right from the onset of the loan. You can make modifications to the car as you see fit, and it will be entirely yours once you are done paying off the loan. This implies that for as low as the application fee you can start driving around your car.
  • Ever-increasing market price ; a car that worth $20,000 today might worth $30,000 tomorrow and car dealers don't care whether you've been saving up for the past 3 years. Opting for an Auto Loan is the best way to avoid buying a car at a higher price. Well unless you have the whole cash at hand, you can go ahead and purchase the car directly with your cash.
  • No collateral ; sometimes the car itself is used as collateral, and no other collateral will be required before you can own a car. In case you default the loan, the lender will only retract the car, and you will not lose any other asset.
  • Quick and easy ; there are more banks and monetary organization venturing into the Auto Loan business, so there are more opportunities to get a car loan. More so, the requirements for Auto Loan eligibility are becoming simpler so that more people can apply.
  • Dealership benefits ; with the rise of Auto Loan, car dealers are now partnering with Auto Loan lenders to provide very enticing offers. And it is the loan takers that benefits most from the offers.
  • Flexible EMI ; Auto Loan gives you the privilege to customize a repayment price and frequency that is convenient for you.

What do you need to get an Auto Loan?

You will need 3 types of documents to obtain a car loan:

  1. Authentic ID ; this is required to ensure you are real. Examples of identification documents that may be needed are an international passport, national ID card, driver's license, birth certificate, etc.
  2. Legit/approved source of income ; documents that show how you earn your money legally. Also, the source of income must stable. Examples of non-eligible sources of income are lottery, monetary gift, etc.
  3. Recent bank statements ; the lender has to be sure of your current financial status. E.g., lenders want to know if you are not having outstanding loans so that it will not affect theirs.


Best Auto Loan calculators


1. OnlineLoanCalculator.org - Calculator Link

OnlineLoanCalculator.org
OnlineLoanCalculator.org

This calculator is an independent car loan calculator; it has a clean interface and calculates very fast. To calculate accurate monthly payment, the calculator put in all factors such as vehicle's sale tax, trade-in value, etc. Other input values required to perform a quick calculation are loan term, purchase price, down payment, rebate amount, and so on. You will be able to see the breakdown of the payment and representation in graphical form. You might also see some advertisements on the web page. But they are car-related advertisements, so they might be beneficial in the long run.



2. Bankrate - Calculator Link

Bankrate
Bankrate

Bankrate is one of the most popular financial comparison services. One of the services provided by Bankrate is this efficient Auto Loan calculator. Bankrate Auto Loan calculator lets you calculate monthly payments with preset loan terms such as 36 months, 48 months, and 60 months. Other inputs required are principal, rate, and status of the car; either brand new or fairly used. Other characteristics of Bankrate loan calculator are recommendations of lenders, documentation on how to use the calculator efficiently, and other tips on how to get the best car loans. Bankrate does not display advertisements.


3. Cars.com - Calculator Link

Cars.com
Cars.com

This Auto Loan calculator generates a comprehensive monthly payment. This calculator is a minimal calculator that accepts few variables and generates result quickly. Not only does the cars.com auto loan calculator calculate accurately, but it also provides suggestions of ideal cars to buy on loan using the estimated price and zip code. This calculator calculates based on four distinct systems which are;

· Car loan

· Affordability

· Cashback or lowest interest

· Loan or lease.

Cars.com displays few advertisements that may or may not relate to cars; you have to tolerate.


4. USAA - Calculator Link

Auto Loan Calculator: USAA
Auto Loan Calculator: USAA

USAA Auto Loan calculator is exclusively available for the United States military members and their families. The calculator puts in factors such as loan amount, model and year of manufacture, interest, and purpose of acquiring the car. With all of these, you can get exact monthly payment before proceeding to take a new loan or refinance an existing loan. Not that this loan is only available for military personnel and their family (both active service and retired), and military verification will be required.


5. Statefarm Auto Loan calculator - Calculator Link

Statefarm Auto Loancalculator
Statefarm Auto Loan calculator

Statefarm calculator does not only allow you to calculate car loans, but you can compare loans in the range of the generated monthly rate. The calculator lets you decide which Auto Loan is convenient for you so that you can apply immediately. The inputs required are the price of the car, term of the loan, interest rate, and down payment. A graphical interface is also provided for easy understanding of the loan break down. While comparing car loans in the result range, Statefarm will display lenders nearest to you.


6. Capital One - Calculator Link

Capital One
Capital One

In addition to generating an accurate monthly payment, Capital One Auto Loan calculator allows you to "get pre-qualified" so that the loan will be granted as soon as possible. With the calculator, you can connect with loan institutes in minutes.


Conclusion of Best Auto Loan Calculator Sites

Note that these calculators are generic and are not 100% accurate. You can get the most accurate monthly payment from loan providers. And it would be better to use loan calculators from Auto Loan providers if they provide one. Nevertheless, it is better to be prepared before approaching an Auto Loan agent. The information contained in this article and various Auto Loan calculators will help you prepare for the loan. All the calculators are web-based, and you can access them from various devices. Good luck!



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